Article I, Section 9 of the Constitution explicitly prohibits ex post facto laws, those that are passed and signed to outlaw some sort of activity after the fact. But don’t tell that to Sen. Chuck Schumer (D-NY). He may soon introduce legislation that would penalize companies that moved their headquarters overseas because the United States’ unfriendly tax climate, reaching as far back as 1994:
A top Senate Democrat’s proposal to limit future deductions for companies that moved tax addresses out of the U.S. as many as 20 years ago would penalize dozens of so-called inversion deals.
The proposal by Charles Schumer of New York, the No. 3 leader in the Senate’s Democratic majority, would reduce the amount of deductible interest for inverted companies to 25 percent of U.S. taxable income from 50 percent, according to a draft obtained by Bloomberg News.
President Barack Obama has included a similar provision in his annual budgets, and this is the first time the language made it into a legislative proposal, Robert Willens, a New York-based independent consultant on corporate taxes, said by phone yesterday.
“It would have a very profound and immediate effect on these companies and would be very effective at reducing the attractiveness of inversions,” Willens said. “This is certainly a political statement.”