Durbin To Monsanto: Don’t export your tax address
With news reports that Monsanto may be looking to acquire Swiss Company Syngenta AG, U.S. Sen. Dick Durbin, D-Ill., the number two Democrat in the Senate, is urging the St. Louis area company not to move its tax address overseas, in a practice known as “inversion.”
In a letter to company Chairman and CEO Hugh Grant, Durbin said, “As you consider acquiring Syngenta AG or any other company, I strongly urge you and the board of directors to maintain Monsanto Company’s headquarters and its tax address in the United States. You and your board must recognize that your company’s continued commitment to America would be good, not only for the country, but also for Monsanto Company’s bottom line.”
Monsanto confirmed this morning that it made an offer of about $45-billion to acquire Syngenta AG. In a statement, the St. Louis area company said, “Combining the two companies would deliver significant value to all stakeholders, including shareholders.” Monsanto’s statement followed media reports that Syngenta AG had declined the offer saying the proposal “fundamentally undervalues” the company.
Durbin's concerns are centered around the fact that, since 2004, more than 40 U.S. corporations have taken advantage of a loophole in the U.S. tax code that allows them to avoid paying taxes here by moving their corporate headquarters, at least on paper, out of the United States. Should Monsanto buy Syngenta, would it made Switzerland its corporate headquarters?
In the letter, Durbin noted that Monsanto’s growth over its 115-year history, “from a small start-up company to a global corporation with more than 21,000 employees” and profits last year in excess of $8.5 billion last year, was made possible “in large part due to U.S. “taxpayer-funded programs and services.” He also said, protection of Monsanto’s billions of dollars in profits comes in part through what Durbin called “a robust U.S. patent protection system provided by U.S. taxpayers,” and he says the company benefits from programs at the National Institutes of Health and the National Science Foundation, as well as a “workforce trained and educated with significant federal, state and local resources.”
Durbin added, “If Monsanto Company decides to invert and move its tax address outside the U.S. to avoid paying U.S. taxes, the tax dollars your company are taking overseas will not support the very programs and people your company relies on to succeed.”
Durbin is the Senate’s leading voice against corporate inversions. In January, Durbin, joined by lawmakers from the House and Senate, introduced the Stop Corporate Inversions Act of 2015, to close the corporate inversion loophole. At the time, he said the law would generate nearly $34 billion over 10 years.
Last month, Durbin along with several other lawmakers introduced legislation to block federal contracts from going to companies that have inverted their corporate headquarters. The measure would also allow federal agencies to keep businesses that subcontract with inverted corporations, from holding federal contracts.