Congress may yet pass legislation this year to curb foreign buyout deals that allow corporations to cut their U.S. income taxes, a leading Democratic lawmaker said on Monday.
Many large corporations have moved to trim their taxes in recent months by reincorporating overseas through the acquisition of a rival in a maneuver dubbed "inversion."
"I am concentrating on building the proposal that can get Democrats and Republicans to stop the parade of inversions during the lame duck session," said Senator Ron Wyden, referring to the last session of this Congress in November and December.
Wyden chairs the Senate Finance Committee, which writes tax law, with the House of Representatives Ways and Means Committee.
Wyden, a Democrat, said there is still time for reform legislation.
President Barack Obama has said such inversion deals are unpatriotic. Treasury Secretary Jack Lew has promised to curb the practice, but all parties agree that making any inversion change part of a broader tax reform would be the best option.
November elections could reshape the next Congress and lawmakers have only a few weeks to settle outstanding business.
Dozens of expired temporary tax breaks, known as extenders, have yet to by dealt with by Congress and some lawmakers have considered tying their fate to inversion legislation.
"I have heard legislators mention that," Wyden said. "I have heard legislators mention a variety of different approaches."
Wyden said he hopes to conceive a plan to discourage inversions between now and the end of the year.
Lew has said officials would prefer to see Congress close inversion loopholes but he might use executive action to discourage the practice. He could deem certain deductions for corporate loans out of bounds in one such move, several tax experts have said.
Wyden said he talks with Lew most weeks about tax issues but he declined to suggest any approach.
"Let me have an opportunity to see what they are proposing," he said. "My bottom line is that this parade of inversions has got to be stopped."
