Urges Congress and President to enact legislation which prohibits awarding federal contracts to inverted domestic corporations.
Impact
The resolution reflects growing concern among lawmakers about the financial implications of corporate inversions. If enacted, proposed legislation at the federal level could prevent inverted companies from securing government contracts, thereby impacting their operations and profitability. This move seeks to promote what former Treasury Secretary Jack Lew referred to as 'economic patriotism,' aiming to deter corporations from fleeing the U.S. tax system by establishing operations under more favorable tax conditions abroad.
Summary
SCR87 is a Concurrent Resolution from the New Jersey Legislature urging Congress and the President to prohibit the awarding of federal contracts to inverted domestic corporations. These are businesses that have moved their legal incorporation abroad, often to countries with lower tax rates, thereby evading U.S. tax obligations. The resolution emphasizes that this practice undermines economic integrity and encourages companies to avoid their tax responsibilities, which negatively impacts the U.S. economy.
Contention
One notable point of contention surrounding SCR87 involves the balance between encouraging business operations and preventing tax evasion. Proponents argue that preventing inverted firms from receiving federal contracts will foster a fairer economic environment while opponents might express concerns about the implications for business growth and international competitiveness. The resolution comes at a time when similar legislative efforts are being discussed in Congress to address the rising trend of corporate inversions.