Thomas Perez’s recent appearance on “On the Money”, proved his economic naivete once again. It begs the question as to how he can be the head of the Department of Labor?
When asked about inversions, he used an anecdote to set the tone of the discussion. It was about a Fortune 500 Exec who (anonymously) proclaimed “I’d rather be rich than right!” implying that a) these people were willing to do the “wrong thing” to make money and b) that inversions are wrong in general.
By implying inversions are wrong, Perez completely and conveniently ignores the fact that our tax laws currently make taxes lower when a foreign corporation owns a US business than when a US company owns that same business. How stupid is that! That not only provides incentive for US companies to do inversions, but it incentivizes US companies to sell out to foreign owners. Stated differently, it is more profitable for a foreign company to own a US company, than it is for a US entity to own that same company. The law then actively promotes the movement of multinational headquarters out of the US, taking untold numbers of jobs with them.
Only someone who is both economically ignorant and politically partisan could support this status quo, and Thomas Perez fits the bill. Perez as the head of the Department of Labor is in charge of improving the situation for workers – but by his actions, he makes it much worse. He should be making it a priority to advocate for change in our tax policy to make it more friendly for our companies in the United States, not for their foreign competitors.