Democratic presidential front-runner Hillary Clinton this week will propose a new tax on corporations that merge with foreign companies in order to decrease their tax bills.
The proposal follows a slew of corporate inversions in recent years, in which newly merged U.S. companies transfer a portion of their shares to foreign entities in order to incorporate in lower-tax nations.
Clinton campaign aides told the Associated Press that the "exit tax" would affect foreign earnings at the time of the inversion. The revenue generated by the tax would reportedly go toward manufacturing employment initiatives.
The Treasury Department has sought to deter those mergers, but agency officials said that only Congress could stop them altogether.
The Obama administrations called for raising the stock transfer threshold from the current 20 percent to 50 percent. Clinton, who supports that measure, would implement the "exit tax" on subsequent deals that transfer a majority of shares.
Republicans, who control Congress, counter that lawmakers should instead combat inversions by making the U.S. tax code more appealing to businesses.
Clinton previously called for efforts to curb inversions in the wake of a proposed $160 billion merger between New York-based Pfizer and Irish rival Allergan that would establish the world's largest pharmaceutical company.
