Jul 15, 2014 4 min read

Corporations are people, Mitt Romney told us.

Corporations are people who can be religiously devout, the U.S. Supreme Court ruled a few weeks back.

It turns out, unlike their corporeal counterparts, corporations are also people who can relocate to anywhere they wish in order to get a tax rate they find the most agreeable.

Many U.S. corporations – all too many, really – have lately been in the habit of engineering mergers with overseas corporations, called inversions, largely for the purpose of being able to change their address and avoid paying the 35 percent tax rate currently levied against corporations in the United States (though they often pay much less, thanks to deductions and loopholes). Mylan, the drug manufacturer based in Southpointe, announced Monday it had hatched such a deal, snapping up the foreign generic drugs division of Chicago-based Abbott Laboratories. As a result, Mylan will reincorporate in the Netherlands, though the maneuver will have no impact on its United States operations or its jobs here, and the company will continue to pay taxes on its domestic profits.

While the powers that be within Mylan served up platitudes about it being “the right strategic transaction” and extolling the company’s “strong momentum,” there was a brute, bottom-line rationale for grabbing Abbott in a $5.3 billion stock transaction – it lowers what Mylan has to pony up to Uncle Sam, depriving federal coffers of revenue that could be used for transportation, education and a whole panoply of other public services.

There were also smooth bromides emanating from Southpointe about the merger creating “enhanced financial flexibility,” and the company being in a “more competitive global tax structure.” Yes, Mylan’s shareholders are clear winners in all this.

But the clear losers in this deal, and others like it, are Americans who have to confront crumbling roads, underfunded schools and a stagnating standard of living. It’s estimated the federal government lost $222 billion between 2008 and 2010 thanks to corporate tax avoidance, with public schools and colleges, to cite two examples, losing almost $10 billion, according to the National Education Association. Think about that the next time your property tax bill comes due, or you have to write a hefty check for tuition.

In The New York Times Tuesday, business columnist Andrew Ross Sorkin conceded “there’s something morally disconcerting about a company like Mylan, which is a beneficiary of United States taxpayers who pay for Mylan’s drugs through Medicaid and Medicare, leaving the country, in part, to pay less in taxes.”

Yes, and there’s also something morally disconcerting about a company like Mylan, and other conglomerates like it, pleading with lawmakers to bestow a lower tax rate upon them when, at the same time, Congress has been unwilling to extend benefits to the long-term unemployed and the most trifling amount of government assistance is sneeringly dismissed as a “handout” or “free stuff” by the tea party crowd. Corporate chieftains have lately been faring very well. So have the shareholders they report to. How much is enough for them?

While President Obama has suggested lowering the tax rate from 35 percent to 28 percent, some lawmakers on Capitol Hill want to go a step further and institute a two-year moratorium on these mergers. The proposal also says that, for tax purposes, a company would remain U.S.-based if 25 percent of its sales, assets and employees remain in the country.

U.S. Sen. Elizabeth Warren of Massachusetts, one of the sponsors of the legislation, put it clearly: “Big corporations are using the tax inversion loophole to juice their profits and avoid paying billions of dollars, while working families are forced to foot the bill.”