Tag: South Jersey

With some calling 2015 “the Year of the Merger,” we saw a whopping $4.7 trillion in mergers last year, the largest volume in history. Shell and BG Group, Time Warner and Charter Communications, Dell and EMC, Heinz and Kraft, all began consolidating. Despite this ever-growing trend, little attention has been paid to how these…However, late last month the Department of Justice and attorneys general from several states sued to block insurance giant Aetna’s plans to acquire Humana for $34.1 billion. Blocking it, along with the planned merger between Anthem and Cigna, the Department rightfully recognized that “these mergers threaten to harm millions of consumers across the country, as well as the doctors and hospitals who provide their medical care.” Such action to slow the explosion of mergers is long overdue.

The Department of Justice lawsuit claims that the insurance company mergers would harm seniors, working families and individuals, employers, doctors, and other healthcare providers. Such industry concentration would limit price competition, potentially raising costs. It would likely reduce benefits, leaving consumers with lower quality plans at higher costs. And it would decrease incentives for innovation that could improve our health care system.

Additionally, a recent study led by Zach Cooper from Yale University found that areas with monopoly hospitals saw prices that were 15.3 percent higher than areas with four or more hospitals.

What’s good for business isn’t always good for American consumers. And American families don’t have the luxury of hiring consultants and lawyers to game the system to their benefit.

We all pay taxes to contribute to our nation’s needed public investments. Our system of taxation is such that those with the means to pay more are asked to do so. Large corporations seeing record profits should be contributing meaningfully. American corporations benefit from our roads and bridges, our educated workforce, our legal system, patent protections, and the security provided by our military. Yet corporations have increasingly sought to creatively move their money around to avoid paying taxes. One tactic that has become more common in recent years is acquisition by a foreign company in a special type of merger is known as a “corporate inversion.”

The name is less important, however, than the consequences. As our nation’s infrastructure crumbles and the cost of education and housing continues to rise, the loss of revenue from these corporations means working families have to pick up the slack.

As New Jersey’s only member of the Ways and Means Committee, I keep a watchful eye on such tax-dodging maneuvers. I have joined with my colleagues on that committee, which oversees our nation’s tax policy, in calling for Congress to act legislatively to stop such inversions. I am also monitoring closely the Department of Treasury’s proposed regulations to limit the incentives for such deals in a way that is effective and workable for small businesses.

Meanwhile, Republicans in Congress have been fighting to make these mergers easier, instead of more difficult. H.R. 2745, the deceptively named SMARTER Act, would have made it easier for the Federal Trade Commission to approve mergers and acquisitions quickly. I joined with my Democratic colleagues in voting against this bill. If anything, we should be moving in the opposite direction – encouraging the FTC to consider long-term consequences to consumers and the erosion of our tax base in proposed corporate mergers.

Whether at the Department of Justice or FTC, as members of Congress or private citizens, we need to hold corporations accountable for profit-grabs at the expense of consumers and investments in America. Working together, we can stem the tide of anti-consumer mega-mergers and begin to put corporate patriotism over corporate profits.