The anti-inversion commotion in Washington, D.C., is “more bark than bite” and unlikely to turn into reform in time to damage Medtronic’s (NYSE:MDT) $43 billion deal with Covidien (NYSE:COV), according to analysts with Morgan Stanley.
Democrats have won support from the White House for efforts to penalize companies that relocate their corporate headquarters outside of the U.S. in order to benefit from lower tax rates, but Republicans won’t be so eager to play along, the analysts wrote. Sign up to get our free newsletters delivered right to your inbox.
“It remains unlikely that a legislative fix will be possible before the next presidential cycle, as Republicans are unlikely to agree to inversion reform without a broader overhaul of the corporate tax code, which in turn would likely be unpalatable for Democrats,” according to analysts David Lewis and James Francescone.”
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