The corporate inversions just keep on coming, and the White House and its allies are calling them unpatriotic. But it's a funny sort of "patriotism" that insists American businesses put the Treasury's insatiable appetite for revenue ahead of the best interests of their customers, shareholders, and employees.
The latest inversion — the term for a corporate merger or acquisition that allows a US company to reincorporate overseas — is the largest to date: Chicago-based pharmaceutical company AbbVie is paying $55 billion to acquire Shire PLC, an Irish drug maker incorporated in the United Kingdom, but with a manufacturing and management base in Lexington. By moving its legal domicile to the UK, AbbVie expects to see a lower tax bill. The statutory corporate tax rate in Britain is just 21 percent. In the United States, it's a chart-topping 40 percent — the 35 percent federal rate plus an average of 5 percent imposed by the states. By 2016, the move should slice AbbVie's effective tax rate to 13 percent from the 22 percent it pays now, saving millions of dollars a year.
Nearly as big as the AbbVie-Shire deal was one announced last month. Medical-device giant Medtronic is acquiring Covidien, a health supplies business based in Mansfield but incorporated in Ireland, for $43 billion. The inversion will switch Medtronic's tax domicile to Ireland, which taxes corporate profits at just 12.5 percent — less than one-third the onerous US rate.