Economy
By Allan Sloan Columnist February 23 at 7:48 PM
The Treasury Department needs a new position deputy undersecretary for Whac-a-Mole. Maybe that would allow the agency to figure out some way to stop American companies from inverting. Thats the process under which companies get to stay in the United States and benefit from everything our society has to offer, but technically become subsidiaries of foreign companies, which lets them pay a lot less U.S. income tax that they otherwise would.
What prompts me to propose a Whac-a-Mole function for the Treasury is the news that Salix Pharmaceuticals of Raleigh, N.C., has agreed to sell out to Valeant Pharmaceuticals, a New Jersey firm that inverted to Canada. Salix had been planning to invert but called off the deal after Treasury issued regulations in September to stem the inversion flood.
Salixs deal means that two of the three firms that called off inversions as the result of Treasury regulations have now agreed to sell out to inverted companies. The other company is Auxilium Pharmaceuticals of Chesterbrook, Pa., which in November was acquired by Endo International, an inverted faux-Irish firm based in Pennsylvania. ... Once the Salix sale closes, two of the three firms whose inversion moves were stopped by Treasury will have accomplished what they wanted to do. And because the Salix and Auxilium deals arent technically inversions, the Treasury regulations didnt apply.
(A brief aside: I didnt see the Salix-Auxilium connection until my friend Zach Mider of Bloomberg told me about it while we were discussing something else. Thanks, Zach.)