Tuesday, October 28, 2014

Corporate Inversions and the Revolving Door of Tax Attorneys

My inbox had some long winded story from Bloomberg BNA about some candid remarks from a tax attorney names Hal Hicks on how corporate inversions became such a hot topic:
Hicks epitomizes the world of high-level Washington lawyers who have played a behind-the-scenes role in helping these tax-driven address changes proliferate. Top federal tax officials, many of them career corporate lawyers, have sometimes closed tax breaks only after companies slipped through them. And former officials like Hicks use skills and contacts honed in office to help companies legally outmaneuver the government. Until this year, when address-shifting by more than a dozen companies worth $100 billion caught policy makers’ attention and President Barack Obama clamped down again, inversion rules had for a decade attracted little notice outside the small community of international tax lawyers in Washington. At the Treasury Department and the Internal Revenue Service, officials—many on hiatus from private practice—crafted the rules in dialogue with top corporate law and accounting firms. While some European nations have historically relied on career civil servants, the top ranks of the U.S. tax administration have swapped staff with industry for decades. It’s a low-cost way to provide government with the best legal talent, said Gregory Jenner, a former acting assistant Treasury secretary, who calls it an “incredibly beneficial tradition.” “Putting rookies into these jobs—they would be overwhelmed,” Jenner said. “It’s too high-level, too sophisticated, too complicated.” The risk, critics say, is that some government lawyers may continue to sympathize with corporate interests, or be swayed by former colleagues.
I can see some conservatives reading this and saying that this is due to the overly complex nature of U.S. tax laws governing multinationals. I can see some liberals reading this and saying this is what we get when we let the representatives of multinationals write our tax laws. I would say – they are both right.

1 comment:

Thornton Hall said...

A Washington lawyer reading this (yours truly) would point out that nothing has changed here in Washington. The difference is the rootless nature of the 21st Century corporation.

Or just blame the lawyers like a local yahoo. Whatevs.