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White House Cracking Down on Tax-Dodging Mergers

CBN

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The White House is cracking down on American companies merging and moving overseas to escape U.S. taxes.

New regulations from the Treasury Department are aimed at making so-called "tax inversions" less lucrative. In such transactions, an American-owned business merges with a foreign company in a country with a lower tax rate.

"This action will significantly diminish the ability of inverted companies to escape U.S. taxation," Treasury Secretary Jacob Lew said.

One possible example came this summer when Burger King announced it would acquire the Canadian coffee and doughnut chain Tim Hortons. But it is not clear if the new rules will block that merger.

President Barack Obama praised the actions of the Treasury Department.

"While there's no substitute for congressional action, my administration will act wherever we can to protect the progress the American people have worked so hard to bring about," the president said.

About 50 U.S. companies have carried out inversions in the past decade.

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