UPDATE 1-Top U.S. lawmaker wants corporate tax loophole 'plugged now'
(Adds Hatch comments, paragraphs 4-9)
By Kevin Drawbaugh
WASHINGTON, July 22 (Reuters) - Immediate government action is needed to stop U.S. corporations from avoiding federal taxes by shifting their tax domiciles overseas through deals known as inversions, the head of the U.S. Senate Finance Committee said on Tuesday.
Nine inversion deals have been agreed to this year by companies ranging from banana distributor Chiquita Brands International Inc to drugmaker AbbVie Inc and more are being considered. The transactions are setting a record pace since the first inversion was done 32 years ago.
Washington is increasingly concerned about this. "Let's work together to immediately cool down the inversion fever ... The inversion loophole needs to be plugged now," said Democratic Senator Ron Wyden, finance committee chairman, at a hearing.
Several Democrats have offered bills to curb inversions, which let companies cut their taxes primarily by putting foreign earnings out of the reach of the Internal Revenue Service.
Wyden said his panel asked the chief executives of several inverted companies to testify at the hearing on international tax law problems. "None accepted our invitations," he said.
No new anti-inversion law is likely to be approved as long as Republicans insist that such a step be accompanied by an overhaul of the tax code, policy analysts said.
Utah Senator Orrin Hatch, the finance committee's top Republican, said, "The ultimate answer to this problem - and the only way to completely address the issue of inversions - is to reform our tax code. Continuación...