Jack Lew, US Treasury secretary, has urged Congress to crack down on merger deals in which companies seek to redomicile overseas to reduce their US taxes, invoking the need for “economic patriotism” in reversing a practice that has flourished in recent months.
In a letter to Dave Camp, the Republican chairman of the tax-writing House Ways and Means Committee, Mr Lew said US lawmakers should pass measures to stamp out “inversions”, which were contained in the Obama administration’s most recent budget proposal and later embraced by senior Democrats on Capitol Hill.
Mr Lew said the tax change should take effect retroactively to May 2014 – the time when Pfizer, the US drugs company, was considering a relocation to the UK in conjunction with its $106bn bid for AstraZeneca, a British rival, that ultimately collapsed.