Tax Inversions: The Good the Bad and the Ugly

Fuller, Phillip and Henry Thomas. “Tax Inversions: The Good The Bad and The Ugly.” Business Quest (2017)

16 Pages Posted: 28 May 2017 Last revised: 31 May 2017

See all articles by Phillip Fuller

Phillip Fuller

Jackson State University; Jackson State University - Economics and Finance

Henry Thomas

Jackson State University - Accounting

Date Written: May 24, 2017

Abstract

Tax inversions are a popular topic of discussion among politicians, consultants, news outlets, and academics. Tax inversions are not a new topic; they were discussed in the early 1990s and in the previous decade. Tax inversion is a tax strategy in which a company reincorporates in another country for tax purposes. Several U.S. firms have merged with foreign firms in order to move their headquarters out of the U.S. Firms have defended their tax inversions by saying that inversions enhanced shareholders’ wealth by increasing the firms’ efficiencies and/or reducing their corporate taxes.

The federal government has attempted to reduce and/or eliminate tax inversions. The government is concerned that tax inversions will reduce the tax base at a time when the federal government is experiencing budget deficits and the national debt is at an all-time high. Furthermore, individuals are increasingly aware of the huge financial disparity between the wealthiest members of our society and everybody else, and they believe tax inversions exacerbate this disparity in wealth.

This paper discusses the history of tax inversions along with tax inversion research, and addresses current status of inversions and possible solutions. The purpose of this paper is to help individuals better understand tax inversions.

Keywords: Tax inversions, Tax fairness, Repatriation, history, solutions

JEL Classification: K35, H25, H26, D63, G34

Suggested Citation

Fuller, Phillip and Thomas, Henry, Tax Inversions: The Good the Bad and the Ugly (May 24, 2017). Fuller, Phillip and Henry Thomas. “Tax Inversions: The Good The Bad and The Ugly.” Business Quest (2017). Available at SSRN: https://ssrn.com/abstract=2973473

Phillip Fuller (Contact Author)

Jackson State University ( email )

1400 John R. Lynch St
Jackson, MS 39217
United States

Jackson State University - Economics and Finance ( email )

Jackson, MS 39217
United States

Henry Thomas

Jackson State University - Accounting ( email )

Jackson, MS 39217
United States

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