Carl Icahn hates tax inversions.
Unfortunately, all the CEOs he talks to want to do one to avoid paying taxes.
Writing in The New York Times on Monday, Icahn calls the proposed Allergan-Pfizer merger a “travesty.”
(As a quick refresher, Allergan and Pfizer announced in late November that they planned to merge in a deal that would create a $160 billion pharmaceutical giant based in Ireland. This deal is also a so-called “tax inversion” which will see Pfizer’s tax base shift from the US to Ireland, reducing its effective tax rate and resulting payments to the US government. Shareholders like these deals. Icahn does not.)
But Icahn is, to some extent, already over the Pfizer-Allergan disaster and now more worried about what happens next.
And according to Icahn’s research what happens next is more tax inversions.
Here’s Icahn (emphasis ours):
Not only is [the Pfizer-Allergan deal] the largest inversion in history, but it will also open the floodgates for other companies to leave the United States, further eroding our tax base, damaging our economy and costing many thousands of jobs.
This is not just me speculating. I have spoken to many chief executives who confirm they are planning to follow Pfizer’s lead. But while this inversion has set off a firestorm of public statements by our leading presidential candidates and other politicians, Congress continues to do nothing.
Now for those readers following the increasing political ambitions of Icahn, this commentary isn’t anything particularly new. In October, Icahn formed a new super PAC aimed at, among other things, cutting down on corporate inversions.
This editorial is also interesting in that comes right as worries about Icahn’s other chief public concern — high-yield bonds — come to a head.
On Friday Icahn tweeted that he thinks the meltdown in high-yield bonds is “just beginning.” High-yield debt had its worst day in four years on Friday as investors deal with twin worries about energy companies getting slammed by the decline in oil prices and an imminent shift in the Federal Reserve’s interest rate policy. Markets were selling off again on Monday.
And while we’d imagine the queue for New York Times editorials means Icahn’s latest missive on tax inversions was set to run before the latest market chaos broke out, it seems that Icahn won’t be stopped from railing against US tax policies which impede the leaders of America’s largest corporations from fulfilling their duty to enhance shareholder value.