Inversion is the idea that American companies partner with foreign companies and move their headquarters to those foreign countries to enjoy a lower corporate tax rate and therefore a better competitive situation in the world commerce, because America has the highest corporate tax rate of any country. This is the lefts new cause célèbre. Remember Barack Hussein Obama said again today in his press conference, that US corporations who adopt foreign addresses to avoid US taxes are unpatriotic. Let us examine when his administration helped one $20 billion American company do just that.
It happened as a part of the unique bankruptcy and restructuring of General Motors, started in the Bush administration the bailout did, extended into the Obama administration because only about 30 days of it was in the Bush administration. The idea was to bailout GM, which in part got Obama reelected in 2012. GM’s alive -Osama bin Laden is dead was the catch phrase. Well, part of GM at the time was Delphi Automotive- which consisted among other things, Delphi batteries. Delphi was a wholly-owned subsidiary of GM and was spun off in order to help balance the books in the so-called bankruptcy. Remember the bankruptcy gave the company to the UAW and stripped out all of the retirement accounts that had invested in the bonds which were now worthless.
Delphi was then rolled into a British company and while the new company, Delphi Automotive PLC, was still run from a Detroit suburb, the paper headquarters were in England. As you know that the English corporate rate is 21%, so Delphi’s automotive’s US tax bill was decreased by $110 million a year. This was a taxpayer-funded corporate deserter. Now the IRS in June, because Obama does remember this, sent a letter to Delphi saying that the deal that the IRS helped to broker must be disregarded for tax purposes. That Delphi must pay taxes as a US company. Delphi says no way, we got an agreement, you guys helped to structure this. So they are protesting this.
Of course, the administration has a cover story and here it is: Delphi was on his deathbed. They had to do something to keep the company from being liquidated. The favorable tax treatment may have helped save Delphi. In other words, by avoiding paying $110 million a year in taxes to the United States government, a plan by Barack Hussein Obama and his administration to save GM and this was part of it and Delphi is still in business, otherwise they would have gone under.
We did the obvious, we cut back their expenses including taxes that was patriotic then, today it is treasonous. Pretty interesting so Delphi went through a bunch of different iterations to get to where they are today. The whole basis of the bailout was that they would become a foreign company. That they would be headquartered in Kent, England and there is in fact a Delphi factory in Kent England. At that Delphi factory workers say they never see the corporate bosses who run Delphi, from as I said a suburb of Detroit. Now in order to comply with the tax rules, the chairman and members of the board and CEO and others travel once a year to Kent, to this factory, have a board meeting and then spend a week or two doing London having ‘fun.’
If Walgreens did that they would be an economic deserter, they would be traitors. Everyone would claim they should be hanged, boycotted etc. from the limited intelligence left. But how are they going to explain Delphi. How are they going to explain the Obama administration using tax money in a bailout of GM to take Delphi to England where they can avoid paying a corporate tax which wasn’t as high then as it is now. There is no explanation and they don’t have to make one because not one reporter at the lay press conference or any place has the courage to challenge the administration.