Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Laws, Loopholes Can Test Private, Public Ties Inversion Issue Casts Light on Obligations

Newspaper article Pittsburgh Post-Gazette (Pittsburgh, PA)

Laws, Loopholes Can Test Private, Public Ties Inversion Issue Casts Light on Obligations

Article excerpt

WASHINGTON -- Lawmakers have families, too, and when issues come before them that affect those families, they're often conflicted.

Just ask Sen. Joe Manchin, D-W.Va., who opposes corporate tax inversions even as Mylan, the pharmaceutical company where his daughter Heather Bresch is CEO, is using them to lessen its tax burden.

Or try to ask him anyway. Mr. Manchin, through a spokesman, declined to comment for this story.

However, Mr. Manchin has said publicly that he would gladly support legislation outlawing the inversion loophole that firms such as Mylan are using to reduce their tax burdens by incorporating overseas.

"Inversion should be absolutely repealed," Mr. Manchin recently told National Journal reporter Ron Fournier. "All of them. Get 'em all, Ron. Get 'em all."

All of 'em, ostensibly includes his own daughter, and that has some observers in Washington envisioning tense Manchin family gatherings.

Others say such tough talk doesn't really amount to much since there is little chance Mr. Manchin will have to cast a meaningful vote.

"It's not as if Congress is actually going to adopt this measure. It's symbolic more than anything else. It's not like he's going to have to go home and explain at dinner why he's voting against his daughter's interests," said Bill Allison, editorial director of the Sunlight Foundation.

Votes that advance relatives' interests raise more concerns, as they should, Mr. Allison said, noting several instances worthy of scrutiny.

There's Rep. John D. Dingell Jr., D-Mich., who consistently opposed stricter regulations for the auto industry and supported its 2009 federal bailout. His wife was a General Motors executive and a descendant of the family that founded Fisher Body, an early part of General Motors.

In Pennsylvania, there is Rep. Mike Kelly, R-Butler, who supported legislation favorable to shale drillers while his wife, Victoria, owned at least $1.5 million in shares of two gas companies her great-great-grandfather founded.

Both have said their votes were not motivated by personal gain but by the need to keep Americans employed and to help the national economy by supporting industries that are the backbone of their districts.

Lawmakers widely agree that something must be done to keep American companies from headquartering overseas, but ideological approaches vary.

Democrats want to dissuade offshoring by prohibiting the awarding of federal contracts to overseas companies with at least 50 percent U.S. ownership.

"We ought to put a stop to all inversions, but at the very least, we should stop these companies from receiving federal funding," Sen. Carl Levin, D-Mich., said in a written statement on inversions last week.

Republicans, meanwhile, see inversions as a symptom, not a cause. They want to reduce the corporate tax rate for all companies in order to keep American businesses, and their investments, at home. …

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