Again, A U.S.-based multinational corporation is merging with a foreign counterpart, with the intent to pay taxes at the other country’s lower rate. By joining forces with Ireland-based Allergan, pharmaceutical-maker Pfizer may reduce its effective tax rate from 26 percent to 17 percent. And once again, U.S. politicians are denouncing the deal as a demonstration of corporate America’s allegiance to profits above its responsibility to help pay for the government that enforces patent rights, among other beneficial services. Last year, Congress’s Joint Committee on Taxation projected that all such tax-driven mergers, known as “inversions,” would erode federal revenue to the tune of $33.6 billion over the next decade.
Mihir Desai's academic publications have appeared in leading economics, finance, and law journals. His work has emphasized the appropriate design of tax policy in a globalized setting, the links between corporate governance and taxation, and the internal capital markets of multinational firms. His research has been cited in The Economist, BusinessWeek, The New York Times, and several other publications.