Senator: Dem rhetoric ‘despicable’

A top Senate Republican on Thursday denounced the Democrats’ push to curb a recent wave of offshore tax deals as “despicable,” saying Democrats were more interested in scoring political points than actually solving the problem.

Sen. Orrin Hatch (Utah), the top Republican on the Finance Committee, was particularly incensed that Treasury Secretary Jack Lew and other top Democrats had questioned the “economic patriotism” of companies that sought to reincorporate abroad, slashing their tax bills in the process.

{mosads}The Utah Republican, a 35-year veteran in the Senate, said the Democrats’ use of the term was especially galling because liberals have long recoiled when the GOP questioned their judgment on national security issues.

“Their knee-jerk response was to claim arguments about patriotism were out of bounds,” Hatch said at a speech at the Chamber of Commerce. “Apparently, they see things a little differently these days.”

“Now,” Hatch added, “they feel free to openly and plainly question people’s patriotism, so long as they qualify it as being ‘economic’ and only do so during an election year.”

Hatch’s strong words underscored how divided Democrats and Republicans are on how to proceed on the cross-border mergers known as inversions, which have dominated the tax policy discussion in Washington in recent months. The two parties came together a decade ago to hash out anti-inversions legislation, at a time when top Republicans like Sen. Chuck Grassley (Iowa) also called companies that move offshore unpatriotic.

Hatch has been more willing than other top Republicans to work with Democrats on a targeted measure to curb inversions. But on Thursday, he made clear that he had little interest in the leading Democratic proposals, including a measure from Sen. Charles Schumer (N.Y.) released this week that would target “earnings stripping,” a tax benefit for companies that shift their legal address abroad.

With little legislating expected on Capitol Hill in the coming weeks, Lew said this week that the Obama administration would act on its own in “the very near future” to limit the economic appeal of inversions. President Obama himself has called companies that reincorporate abroad “corporate deserters,” and Democrats have talked about the deals as part of their broader message about economic fairness this election year.

But during his speech Monday, Lew made no reference to the patriotism of companies that place their headquarters abroad, even as he made a now-familiar argument that those corporations rely on U.S. infrastructure and the American education system, among other things.

On Thursday, Hatch said none of the leading Democratic proposals “come close” to meeting his prerequisites for a targeted inversion law. Neither does Hatch want any retroactive measures, nor does he want to raise revenue in anti-inversions legislation. 

“I know I’ve set a pretty high bar for any potential approach for dealing with inversions,” Hatch said. “That’s not by accident.” 

The Utah Republican chided President Obama for giving lip service, but no real leadership, on efforts to overhaul the tax code. House Ways and Means Committee Chairman Dave Camp (R-Mich.) made similar comments on Wednesday, though Camp’s own tax reform draft this year received little support from even his own fellow Republican.

And Hatch said that he’s even spoken with billionaire investor Warren Buffett, an informal adviser to Obama. Buffett is helping to finance Burger King’s merger with the Canadian doughnut chain Tim Hortons, in the inversion deal that’s likely gotten the most public attention in recent weeks.

“I’ll never understand why he’s a Democrat. And I told him that,” Hatch said. 

— This story was updated at 12:50 p.m.