The Obama administration will make a decision on executive action to prevent corporations from leaving the country in the “very near future,” Treasury Secretary Jack Lew said Monday morning.
Speaking at an event on business taxes at the Urban Institute in Washington, Lew placed the responsibility on Congress to address so-called tax inversions, but said that the administration was prepared to step in if lawmakers don’t move quickly enough.
Inversions are tax maneuvers in which corporations buy firms in low-tax countries in order to place their headquarters in that country. Such deals have grown in number in recent months, with Burger King‘s pending acquisition of the Canadian chain Tim Hortons the most prominent case.
“It’s imperative that lawmakers get this done,” Lew said of legislation to prevent further inversions.
Nevertheless, the Obama administration “is clear-eyed about the possibility that Congress will not act may not move as quickly as necessary to respond to the growing wave of inversions,” Lew explained.
“Given that, the Treasury Department is completing an evaluation of what we can do to make these deals less economically appealing.”
For several weeks, the Treasury has been reviewing changes in tax rules that would undercut the tax benefits of inversions.
Although both Democrats and Republicans have expressed concern about inversions and the effects of companies moving their headquarters out of the U.S. on the tax base, many members of the GOP have stated their opposition to short-term measures meant to crack down on deals. Legislation is not likely to clear Congress this year.
Top Republicans, including House Speaker John Boehner, have also questioned whether the Treasury has the necessary authority to unilaterally take the steps that would be required to affect companies’ decisions about inversions.
Lew said Monday that “any action we take will have a strong legal and policy basis,” although he did not delineate what steps the Treasury might take.
