Peppy Profits

TaxesTax inversion deals, where a US firm buys a foreign-based firm in a low tax nation and then locates the merged firm’s headquarters overseas, are particularly appealing for drug and computer chip makers. It’s because both generate substantial overseas profits that face heavy taxation if repatriated. Better yet, the US acquirer lowers its tax rate and uses untaxed cash to buy the target. These deals scream for corporate tax reform.

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