The WSJ announced earlier this week that US company Johnson Controls was in talks with Tyco International based in Ireland to pursue a merger that would likely create a tax inversion and as a result would lower the company's corporate taxes. See weblink at http://on.wsj.com/1KbdaEC
Other US companies have also been implementing tax inversions recently. For example recently a tax inversion occurred when Burger King relocated their corporate headquarters from Miami, FL to Canada. See Miami's own Burger King will be merging with Tim Horton's
- What is a tax inversion?
- What does a US company have to gain by implementing a tax inversion?
- Is this a form of tax avoidance or tax evasion? Explain why.
- What are the ramifications of these tax inversions for the US and cities like Miami?
- On a side note, what did Dennis Koslowski, the prior CEO of Tyco do that caused him to go to jail and how much was involved?