Speed Reads

Playing politics

Obama attacks tax inversions, but his auto bailout funded one

President Barack Obama has made headlines recently with his opposition to tax inversions, a process by which American corporations acquire a small foreign subsidiary and then "re-headquarter" their company abroad, even while the bulk of sales or operations remain in the U.S. This gambit allows them to lower their tax bill.

But it turns out that in 2009, the president's auto bailout program spent $1.7 billion in tax dollars on a small car maker, Delphi Automotive, that underwent this very inversion process. The company relocated to the U.K. to lower its U.S. tax bill by more than $100 million annually.

Obama has called companies that practice inversion "corporate deserters," saying in California last month that regardless of whether the process is legal, it's wrong: "You don't get to choose the tax rate you pay. These companies shouldn't either."

The New York Times reported on Tuesday that the administration is considering some sort of executive action to put a stop to tax inversions, but Obama said on Wednesday that he "never [has] the green light" to act without Congress.