WASHINGTON—Hillary Clinton’s plan to deter companies from leaving the U.S. will include an “exit tax,” her campaign said Monday, making it even more restrictive than President Barack Obama’s proposals.
Like Mr. Obama, Mrs. Clinton wants to prevent companies from leaving the U.S. tax system by merging with a smaller foreign firm. That rule could have discouraged Medtronic PLC from putting its tax address in Ireland and could complicate the similar transaction that Pfizer Inc. is attempting now. Both of those deals use a law that allows such inversions as long as the U.S. company’s shareholders own less than 80% of the combined business.
The Obama proposal has gone nowhere in Congress, stopped by Republicans who say it amounts to erecting walls around the U.S. tax system rather than making it more favorable. Mrs. Clinton would go further, requiring companies to pay U.S. taxes on deferred foreign earnings if they attempt to “game” her new threshold, a campaign aide said Monday.
Mrs. Clinton, the front-runner for the Democratic presidential nomination, will speak about corporate taxes on Wednesday in Iowa. The aide said she would unveil “another major component” of her plan then.