WASHINGTON—Hillary Clinton on Wednesday will unveil a proposal for a new “exit tax” aimed at cracking down on corporate inversions, a practice that permits U.S. companies to merge with corporations overseas to lower their tax bill.
The new tax would be part of a broader effort to target what experts say is roughly $2 trillion in profits U.S. companies are hoarding abroad to reduce their taxes. The Democratic presidential front-runner will propose spending the revenue raised by the new tax to boost manufacturing jobs in the U.S., campaign aides said. They spoke on condition of anonymity ahead of the official campaign announcement.
Clinton’s proposals are part of the economic agenda her campaign has been rolling out this month. They include boosting infrastructure spending by $275 billion and making other new investments in research and clean energy.
The November announcement of a plan to merge drug-makers Pfizer and Allergan to create the world’s biggest pharmaceutical company reignited a fierce political debate over whether such deals should be permitted.
Under the deal, New York-based Pfizer would move its headquarters to Ireland, where Allergan is based. That enables Pfizer to slash its tax rate from around 25 percent this year to about 18 percent. Ireland’s lower corporate tax rate would have saved Pfizer nearly $1 billion of the $3.1 billion in U.S. taxes it paid in 2014.
