(Updates with comments on BofA deal in eighth paragraph.)
July 21 (Bloomberg) -- American International Group Inc. Chairman Steve Miller said lawmakers should bring U.S. corporate tax rates in line with other nations’ to halt firms from switching their legal address to cut obligations.
The U.S. corporate tax rate of 35 percent is the highest in the world, which causes companies to rush for the exits like people do when there’s a “fire in the theater,” Miller said today on Bloomberg TV’s Surveillance program.
AbbVie Inc., maker of the arthritis medicine Humira, announced a deal last week to move its tax home to the U.K. in a purchase for more than $50 billion of Shire Plc. Senate Finance Chairman Ron Wyden, an Oregon Democrat who first said he wanted to address such inversions as part of a broader tax revamp, said last week that he’s exploring near-term options. His committee is scheduled to hold a hearing on the maneuvers tomorrow.
“Our politicians want to lock the doors,” Miller said. “The real answer would be, let’s put out the fire, which means to make our U.S. tax system competitive on a global scale.”
AIG accumulated losses through the financial crisis that enabled the company to avoid payments to the U.S. in recent years after returning to profitability. The New York-based insurer in 2011 announced the hire of Clarissa Potter, former deputy chief counsel of the Internal Revenue Service, to help protect tax assets.
The insurer last month announced that Peter Hancock, 56, would take over as chief executive officer, replacing Robert Benmosche, 70, effective Sept. 1. Miller said Benmosche handled his duties capably while fighting cancer since 2010, and praised JPMorgan Chase & Co. for disclosing this month that CEO Jamie Dimon, 58, will undergo treatment for throat cancer.
“The most important thing, I think, is get out as much as you can about the facts of the situation,” Miller said. “Because if you don’t, you will make it into a long-running story of people speculating and guessing as to what is really behind what hasn’t been said. I think in Jamie Dimon’s case they kind of said it all.”
Miller also said that AIG is “just about complete” in its efforts to resolve disputes with banks over the insurer’s losses on mortgage-related investments. The company announced a deal last week in which it will get at least $650 million as part of a settlement with Bank of America Corp. over faulty home loans.
“This is certainly the largest” deal tied to soured mortgages, he said. “This was a fair way to finish it on both sides.”
--With assistance from Noah Buhayar in New York.