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Obama pushes Congress to end tax inversions

President Barack Obama on Tuesday called on Congress to end tax inversions, saying the Treasury Department's latest move to curb the practice should be adopted.

"It sticks the rest of us with the tab and it makes hard-working Americans feel like the deck is stacked against them," Obama said.

In an inversion, a U.S. company acquires a smaller foreign competitor and moves its tax address. The company aims to get a lower tax rate in the process.

President Barack Obama
Gary Cameron | Reuters
President Barack Obama

The Obama administration has taken various steps to deter inversions and has pushed tax reform initiatives. Monday's policy puts a three-year limit on foreign companies adding U.S. assets to avoid ownership requirements for a later inversions deal.

The Treasury also wants to stop so-called earnings stripping after inversions. The latest moves follow rules introduced in November.

"These new actions by the Treasury Department build on steps we've already taken to make the system fair," Obama said.

He said he hopes the treasury's actions will deter the deals, but noted his administration cannot eliminate the loophole on its own. He called on lawmakers to eliminate "wasteful" loopholes that he said favor wealthier Americans and powerful corporations.

"Only Congress can close it for good. And only Congress can make sure that all the other loopholes that are being taken advantage of are closed," Obama said.

He contended cutting loopholes and boosting tax revenue would create more revenue to fund infrastructure and education.

The Treasury Department's announcement Monday hit shares of Dublin-based Allergan, which has agreed to be bought by Pfizer in the largest inversion deal ever. The pharmaceutical company's stock plunged more than 15 percent on Tuesday.

In a joint statement Monday, Pfizer and Allergan said they would review the Treasury Department policy but would not speculate on its possible effects.

Reuters and AP contributed to this report.