the third witness, dr. desaid zia a professor of law at harvard. a fourth witness will be dr. peter merrill, a doctor of the economics and statistics group at price waterhouse. a fifth assistant will be dr. robinson at the tech school of business at dartmouth and the final witness will be will alan sloan who is the senior editor-at-large for "fortune" magazine. our thanks to all of you for coming. it's our custom that your prepared statements will be used. if you could use your five minutes to summarize, that would be helpful. i know senators have many questions. we're going to have votes at 10:45. this will be a bit of a juggling act. we will try to handle this as well as the chaotic senate schedule allows. mr. stack, welcome. >> thank you, senators. chairman wyden, ranking member hatch and distinguished members of the community. i appreciate the opportunity to appear to discuss these important international tax issues to which your committee has devoted substantial effort i'd like to begin by describing the wor

dr. desaid zia a professor of law at harvard. a fourth witness will be dr. peter merrill a doctor of the economics and statistics group at price waterhouse. a fifth assistant will be dr. robinson at the tech school of business at dartmouth and the final witness will be will alan sloan who is the senior editor-at-large for "fortune" magazine. our thanks to all of you for coming. it's our custom that your prepared statements will be used. if you could use your five minutes to summarize, that would be helpful. i know senators have many questions. we're going to have votes at 10:45. this will be a bit of a juggling act. we will try to handle this as well as the chaotic senate schedule allows. mr. stack, welcome. >> thank you senators. chairman wyden, ranking member hatch and distinguished members of the community. i appreciate the opportunity to appear to discuss these important international tax issues to which your committee has devoted substantial effort i'd like to begin by describing the work

maybe, peter, if you could address this or dr. desai or dr. robinson, whoever has looked into this, but can you tell us about what happens when -- peter talked about fortune 500 companies. you've seen a one-third reduction in u.s. companies. what happens? what is the impact on jobs when you see u.s. companies being acquired by a foreign company? >> yeah, i have not actually studied that issue. it could go either way. if the foreign company is a better managed company, bring in new technology, it could increase jobs. on the other hand, it could go the other way. i don't know what the actual experience has been. >> dr. desai? >> i think you're right to put this in the context of a broader market for corporate control, which is really the issue with foreign acquisitions. i think the issue with foreign acquisitions is particularly with respect to high value added headquarter jobs, those may well get relocated when it becomes foreign owned. that is something that we have seen at least anecdotally. we also know that headquarter jobs are really impor

now let's go to dr. desai. welcome. >> thank you good ranking member hatch, members of the committee, it's a pleasure to this international tax reform. under professor of finance and law at harvard law school. transactions in the u.s. corporate tax of a particular with her to international provisions. my comments outlined the origins of the transaction, the range of alternative solution, guidelines for evaluating reform and some reforms should be avoided. last but not witnessed a wave of merger trend action, the facility in the repatriation of u.s. corporations. as trey jackson affect policy in the changing structure of multinational firms from a policy but acted to train action highlight the increasing cost of employing the worldwide taxed the same in most other large x or countries no longer maintain regimes in the corporate tax rate by other oecd countries from a firm pointed to the transactions highlight the tv in today's economy to grow in firms where they had orders have been split up in the growing impor

>> yes. >> this question is for dr dr. desai, it seems that discussion in tax reform can result in the debate of capital neutrality versus capital import neutrality. such a discussion usually is not helpful, in my opinion. and typically ends up going nowhere. the unit developed an interesting new theory of international taxation. capital ownership neutrality. the idea being that a tax system should not distort the ownership of assets. and in fact, capital ownership neutrality seems to fit in nicely with the acquisition inversions that we're seeing today in which a u.s. corporation across a smaller foreign corporation inverts as part of an qcquisition. it seems that the u.s. corporation is at a disadvantage if it is competing against a foreign corporation, based in a country with a territorial-type tax system. as we know, most developed countries have adopted territorial types of tax systems. 28 of the 33 oecd countries have territorial-type tax

maybe, peter, if you could address this or dr. desai or dr. robinson, whoever has looked into this, but can you tell us about what happens when -- peter talked about fortune 500 companies. you've seen a one-third reduction in u.s. companies. what happens? what is the impact on jobs when you see u.s. companies being acquired by a foreign company? >> yeah, i have not actually studied that issue. it could go either way. if the foreign company is a better managed company, bring in new technology, it could increase jobs. on the other hand, it could go the other way. i don't know what the actual experience has been. >> dr. desai? >> i think you're right to put this in the context of a broader market for corporate control, which is really the issue with foreign acquisitions. i think the issue with foreign acquisitions is particularly with respect to high value added headquarter jobs, those may well get relocated when it becomes foreign owned. that is something that we have seen at least anecdotally. we also know that headquarter jobs are really impor

dr. mihir desai. our fourth witness will be dr. peter merrill. our fifth witness will be dr. leslie robinson who is an associate professor of business administration at dartmouth. our final witness will be mr. allan sloan. our thanks to all of you for coming. it is our custom that you're prepared statements will be made a part of the hearing record in their entirety. if you could use your five minutes to summarize it would be helpful. dino centers have many questions we will have some votes at 1045. this will be a bit of a juggling act. we will try to handle this as well as the chaotic senate schedule allows. so welcome. juggling act. we will try to handle this as well as the chaotic senate schedule allows. mr. stack, lcome. >> thank you. i appreciate the opportunity to appear today chairman wyden, ranking member hatch and distinguished members of the community. i appreciate the opportunity to appear to discuss these important international tax issues to which your committee has devoted substantial effort i'd like to begin by describing the work we're doing in the g-20 betts

unintended, but perhaps negative consequences, demanding the location of even more jobs overseas is what dr. desai talked about. my concern is foreign acquisitions. recently we sat down with u.s. companies to talk about this issue. i've been doing this the past few years and worked on this in the super committee. we are hearing over and over again the fact already foreign acquisitions are on the rise, even without this rule. if we put this rule in place then we could limit the deductibility of interest as one of my colleagues said, and we could make it harder to be an american company. we'll have more and more foreign companies owning u.s. assets. some of those will be takeovers. recently, biopharmaceutical company came to see me, last week, from the boston area. i asked about the acquisitions in the boston area biopharma companies. 28 companies have been acquired in the last several years. 17 of those 28 were acquired by foreign entities. you put the hole in the dam here then you are going to have a flood here and have a worse result, more pressure on jobs leaving this country. so i mean we talk