Tuesday, January 13, 2015

A win! (But not really.)

In an earlier post, this humble blog begged readers to support a drive by Al Franken and Elizabeth Warren to prevent Obama's nominee Antonio Weiss from becoming the Under Secretary of the Treasury for Domestic Finance, the number two Treasury position. Weiss is an investment banker of the sort who nearly ruined this country during the Dubya years.

Weiss was responsible for engineering a tax inversion scheme which allows Burger King to avoid paying a billion dollars in taxes. Oddly enough, Obama has been a sharp critic of these schemes -- and of the BK deal in particular.

The good news: Weiss is out.

The bad news: Weiss will accept a lower position at Treasury, which does not require congressional approval. In all likelihood, he'll be doing the exact same job he was always intended to do, while a prog-friendly figurehead functions as "the new Number Two." (Insert Patrick McGoohan joke here.)

The question: Why did Obama -- or rather, Jacob "Jack" Lew -- insist on Weiss? Obama has taken much heat from the right for his opposition to tax inversions. In fact, the administration has made genuine efforts to curb the practice:
The Treasury Department issued new rules Monday evening to discourage U.S.-based companies from moving their headquarters overseas to reduce their tax bills to Uncle Sam.
“These first, targeted steps make substantial progress in constraining the creative techniques used to avoid U.S. taxes, both in terms of meaningfully reducing the economic benefits of inversions after the fact, and when possible, stopping them altogether,” said Treasury Secretary Jacob J. Lew in a statement.
Weiss will now work for Lew.

This sequence of events is not easy to understand. Seems to me that if Lew were serious about ending inversions, he wouldn't hire Mr. Inversion. If you're a doctor dedicated to fighting typhus, would you hire Typhoid Mary?

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