The U.S. does not have a tax policy that makes sense, former General Electric chairman and CEO Jack Welch told CNBC on Tuesday. Losing American corporations to overseas countries with lower corporate taxes would be a sin, he added.
Welch was interviewed on "Squawk Box" after being named No. 12 on the CNBC 25 list of the most influential men and women in business and finance since 1989, when CNBC started.
"We are giving away money ... because we don't have a rational tax policy," he said.
In one example, New York-based Pfizer's bid to buy U.K. rival AstraZeneca—worth nearly $100 billion—could save the U.S. drug-maker billions in taxes because of its cash overseas. But if accepted, it could send the American company packing in search of lower corporate tax rates in Britain.
"I think we need to have a real national debate about our tax policy and what corporate taxes really mean. Who gets taxed when you tax a corporation? The consumer. The buyer," the former GE chief said.
"Corporations sweat. They cry. They bleed. They do all these things," he continued. "The idea that [companies] are just bricks and mortar is nonsense."
The recent trend of U.S. firms trying to buy foreign companies—in part for a tax benefit—can also be highlighted by General Electric's pursuit of French engineering group Alstom.
"Let's take the GE deal. They've got cash overseas. They're globalizing. The Alstom deal is a great fit," said Welch, who said that GE's relationship with France has always been strong and he's optimistic about a deal.
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