A number of high-profile U.S. corporations have, or are reportedly considering, corporate “inversions,” where they move their “headquarters” overseas to avoid paying U.S. corporate income taxes. Unless Congress acts, federal and state governments are set to lose, at minimum, tens of billions in revenue to support urgent priorities such as schools, roads and bridges, and public safety.
North Chicago-based AbbVie, a pharmaceutical company, is a prime example of how this works. AbbVie recently merged with Shire, a much smaller corporation, and can now move its headquarters to Britain on paper. AbbVie could avoid as much as $8 billion in taxes over the next 15 years, according to research group GlobalData.