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Bramwell's Lunch Beat: Inversion Alert, Speaker Ryan, Tiberi’s W&M Vision

Oct 30th 2015
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Pfizer CEO says US tax regime pushing him to seek alternative
Pfizer Inc. CEO Ian Read said on Thursday he won't let potential political fallout deter him from pursuing a tax-reducing takeover that could move the company's legal address outside the United States, as Pfizer and rival Allergan PLC confirmed they are in preliminary talks to combine, wrote Richard Rubin and Jamie Heller of the Wall Street Journal. While declining to comment about talks with Allergan, Read told the Wall Street Journal that he had a duty to increase or defend the value of his company, which he said is disadvantaged by the US tax system. A merger with Ireland-based Allergan could enable Pfizer, with an effective tax rate of 25.5 percent last year, to lower its tax bill. Allergan, itself the product of multiple cross-border takeovers including one this year, is expected to achieve a tax rate of about 15 percent. The US tax code is “an urgent issue that we need to fix,” Read said.

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Speaker Ryan may move Republican tax rhetoric closer to reality
Andy Sullivan of Reuters wrote that Republican presidential candidates who promise to cut and simplify US taxes would find a powerful ally if they reach the White House: House Speaker Paul Ryan (R-WI). The newly elected speaker is a long-time champion of thoroughly overhauling the tax code. “How reassuring it would be if we actually fixed the tax code,” Ryan said in his acceptance speech after being elected speaker on Thursday. Ryan's predecessor as House speaker, John Boehner (R-OH), showed little interest in tackling a tax code overhaul. Ryan, by contrast, had planned to overhaul taxes as chairman of the House Ways and Means Committee before he reluctantly agreed to take Boehner's job. With a Republican in the White House, “it is quite likely in the first two years you see an attempt to do a dramatic overhaul of the tax code,” said Rohit Kumar, a former top Republican Senate aide who is now with PwC.

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Tiberi lays out ‘vision' for Ways and Means panel
Rep. Pat Tiberi (R-OH) has sent a letter to the entire House Ways and Means Committee, sharing his “vision” for what the powerful tax-writing committee would do under Paul Ryan's speakership, wrote Jake Sherman of Politico. Tiberi, a close ally of departing speaker John Boehner, is facing Rep. Kevin Brady (R-TX) for the gavel. A steering committee will choose between the two Republicans in the coming weeks. Brady is more senior than Tiberi, but Texans chair six other House committees. Tiberi said he wants the committee to play a “leading role” in “fixing our federal transportation infrastructure system.” He wants to take the “next steps to advance free trade” and lead the “fight for comprehensive tax reform.” Tiberi added that he has a vision for a Ways and Means Committee that “leads in moving pro-growth tax reform and tax relief for individuals, families, and employers.”

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Johnson to temporarily lead Ways and Means
While Tiberi and Brady jockey for the Ways and Means gavel, Rep. Sam Johnson (R-TX) will temporarily take the helm of the panel until a new chairman is chosen, wrote Vicki Needham of The Hill. “I am honored to serve the Ways and Means Committee during this time of transition,” Johnson said in a statement. “Under Chairman Ryan's leadership, we have enjoyed great successes and I will continue to focus our efforts on critical issues moving forward.” Once a new chairman is selected, Johnson will resume his duties as chairman of the panel's Subcommittee on Social Security.

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Senators probe IRS use of surveillance tools
Top lawmakers on the Senate Judiciary Committee are demanding information on the IRS's use of a controversial surveillance device, wrote David McCabe of The Hill. Committee Chairman Chuck Grassley (R-IA) and Ranking Member Patrick Leahy (D-VT) sent a letter on Thursday to Treasury Secretary Jacob Lew, pressing him on whether the agency is using devices that can track cellphones. The message follows a report from The Guardian that the IRS spent thousands of dollars upgrading the technology – known as StingRays – that imitate cell towers to determine the location of cellphones. The devices can also gather information related to the phone's owner or contacts. Grassley and Leahy asked Lew to respond with information about whether the agency had used the technology and if it had policies in place governing the handling of data collected by the devices. They also asked whether the devices were used without a warrant.

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