Billionaire investor Mark Cuban isn’t a fan of tax inversions.
In a series of tweets and interviews, the owner of the Dallas Mavericks said companies that buy a company to take advantage of another country’s lower tax rate are “gaming the system." If the trend continues, he expects taxes in the U.S. will increase across the board.
He suggested investors should consider selling shares of companies that utilize the tactic.
“If I own stock in your company and you move offshore for tax reasons I’m selling your stock," Mr. Cuban said Friday morning on Twitter. “There are enough investment choices here."
In a subsequent tweet, he added: “When companies move off shore to save on taxes, you and I make up the tax shortfall elsewhere sell those stocks and they won’t move."
Mr. Cuban’s comments come as debate about the topic has heated up in Washington. President Barack Obama has urged Congress to stop them through quick-fix legislation and U.S. Treasury Secretary Jack Lew called for American companies to show some “economic patriotism."
Despite the calls for action, legislation appears unlikely to pass soon. Republicans view a short-term fix skeptically, believing it could worsen U.S. firms’ competitive position and encourage more foreign takeovers. For lawmakers of both parties, it also could steal momentum from the push for a broad overhaul of the tax code.
In an interview on CNBC, Mr. Cuban discussed the negative ramifications of tax inversions. “If this is part of a movement where in aggregate it really has a material impact on taxes paid, then again taxes are going to go up," he said.
“The cost of doing business…not the actual tax rate we pay…particularly for companies, individuals, entrepreneurs are easier to change and have a far greater impact on our net worth than all the ramifications and ruminations that the government can try to do to fix the tax code," Mr. Cuban added.
Original article: blogs.wsj.com/moneybeat/2014/07/25/mark-cuban-on-tax-inversions-if-you-move-overseas-im-selling-your-stock
