Hillary Clinton will hit on a populist message in Iowa on Wednesday when she rolls out her plan to “crack down” on companies who move overseas to avoid taxes, according to a Clinton aide.
In particular, the aide said, Clinton will call out Pfizer, which merged with Allergan earlier this year. The merger, which would create the world’s largest pharmaceutical giant, would lower the new giant’s U.S. corporate tax bill because Allergan is based in Dublin, Ireland, a country with a lower corporate tax rate.
The Clinton pitch is aimed at tapping into populist fervor against corporations and tax evaders. Many on the left of the Democratic Party — especially in Iowa — feel corporations get off too easy in the United States and want to see them pay a higher tax rate. Clinton has sought to tap into this throughout her campaign, regularly noting that the “the deck is stacked in favor of those already at the top.”
The aide previewed the policy on background, allowing Clinton to roll out the plan on the record.
To stop or punish companies that more abroad to avoid taxes, Clinton will particularly target “earnings stripping,” the practice where a corporation moves earnings from a country with higher taxes to one with lower taxes, such as Ireland. This proposal, the aide said, would save the United States an estimated $60 billion over 10 years.
“Clinton will say that if Congress has refused to act, she believes this practice can be dealt with through executive action,” the aide added. “This practice of ‘earnings stripping,’ which could be a primary benefit of the Pfizer-Allergan merger, costs our nation needed revenues and disadvantages American small businesses and individuals who cannot take advantage of this loophole.”
Clinton, the aide said, believes the “Treasury Department could use its legal authority to crack down on this loophole.”
Clinton has been outspoken about the Pfizer-Allergan merger before.
In a statement released last month, Clinton said the proposed merger “will leave U.S. taxpayers holding the bag.”
“As president,” she wrote, “I will fight to reform our tax system to reward growth, innovation, and job creation here in the United States. We cannot delay in cracking down on inversions that erode our tax base.”
Clinton’s pitch is part of her month-long focus on jobs and infrastructure, a push she began last month in Boston with a plan to spend $275 billion on rebuilding roads, bridges and investing in other infrastructure investment.