The subject of tax inversion, in which American firms avail of lower tax rates in foreign countries by merging companies in those countries, has become very topical in the last couple weeks thanks to a decision by Abbvie, a drug company, to merger with Shire, an Ireland-based firm and move its headquarters overseas. One of at least 47 tax inversions in the last decade, the Abbvie-Shire deal is the largest such action yet, worth $54 billion. Perhaps unsurprisingly, President Obama and Democrats in Congress have become apoplectic with rage at the audacity of a business making a prudent decision to escape bloodsucking taxes.
Tagged: export-import bank
Slowly but surely, Washington is waking up to the idea that the current surge in populism is not some flash in the pan, but a real and sustained trend in politics on the right and left. Distrust and frustration with an economic and political system that rewards, defends, and bails out the wealthy, powerful, and well-connected while leaving the middle and working class to get squeezed by stagnant wages and the higher costs of the basic staples of life, has made things which were once considered humdrum politics as usual suddenly controversial.
Rarely do some of the nation’s most powerful politicians and businesspeople laud banks that report big profits when in fact they have lost billions of dollars. But we’re witnessing this spectacle on behalf of the Export-Import Bank of the United States, which for many decades, and for good reason, has been called by its critics “The Bank of Boeing.” Its charter expires September 30, and a battle over its possible extension is brewing between the political establishment and reformers.
Shortly, Congress will be debating the fate of the U.S. Export-Import Bank (Ex-Im). Its authorization — last extended in 2012 — will expire on September 30 unless reauthorized. Ex-Im was first incorporated in 1934 by President Franklin D. Roosevelt to finance trade with the Soviet Union. Under the Export-Import Bank Act of 1945, Congress established the bank as an independent agency. It provides loans and loan guarantees (as well as capital and credit insurance) to facilitate U.S. exports. Backed up by the full faith and credit of the U.S government, taxpayers are put on the hook.