Overnight Finance: New limits on offshore tax deals; ‘Panama Papers’ fallout – The Hill

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TREASURY PROPOSES TAX INVERSION RULES: The Treasury Department on Monday announced additional actions it is taking to curb offshore tax deals known as corporate inversions. The proposed rules would go after a practice known as “earnings stripping” following inversions and foreign takeovers. This strategy involves U.S. subsidiaries of inverted companies issuing debt to their foreign parents as dividend distributions and then getting a U.S. tax deduction for their interest expenses. Under the new rules, instruments issued to related parties would be treated as stock rather than debt. The Hill’s Naomi Jagoda breaks them down: http://bit.ly/1PQLpNr.

TRADE SECRETS BILL SAILS THROUGH SENATE: The Senate on Monday easily passed a long-awaited measure that would strengthen federal law and provide damages for U.S. companies affected by the theft of corporate intellectual property.

Sens. Orrin HatchOrrin HatchOvernight Finance: New limits on offshore tax deals; ‘Panama Papers’ fallout Alexander: Cures bill deal could be reached by end of the week Senate easily passes trade secrets bill MORE (R-Utah) and Chris CoonsChris CoonsOvernight Finance: New limits on offshore tax deals; ‘Panama Papers’ fallout Senate easily passes trade secrets bill This week: Senate returns to Supreme Court fight MORE (D-Del.), who have worked together on the measure for the past two years, said their bill would harmonize federal law and give businesses more consistent legal protections when their trade secrets are stolen and they are facing billions in losses.

Coons said that trade secrets, a critical form of intellectual property and the “lifeblood” of many companies, “has somehow slipped through the cracks of federal protection.” The Hill’s Vicki Needham explains what’s inside the bill: http://bit.ly/1XdjKMH.

DOJ TO INVESTIGATE PANAMA PAPERS: The Department of Justice is investigating possible financial wrongdoing after a massive document leak known as the “Panama Papers” made public information about offshore accounts of powerful people across the globe.

“We are aware of the reports and are reviewing them,” DOJ spokesman Peter Carr said in a statement Monday. “While we cannot comment on the specifics of these alleged documents, the U.S. Department of Justice takes very seriously all credible allegations of high level, foreign corruption that might have a link to the United States or the U.S. financial system.”

An investigation into the documents by more than 100 news organizations found that the files include information about 214,000 offshore entities, including the offshore holdings of 140 politicians and public officials across the world, according to the International Consortium of Investigative Journalists (ICIJ): http://bit.ly/1ql7lfw.

PANAMA PAPERS COULD BOOST CORPORATE TRANSPARENCY: The investigation into the “Panama Papers” could increase Congress’s motivation to pass legislation requiring states to collect information about the true owners and controllers of shell companies, supporters of the bill said: http://bit.ly/1qlyrTA.

BANKING COMMITTEE TO VOTE ON SEC NOMINEES THURSDAY: The Senate Banking Committee is set to vote Thursday on a pair of nominees to join the Securities and Exchange Commission.

The longstanding logjam of nominees pending before the panel is breaking, after Chairman Richard Shelby (R-Ala.) announced Monday that his panel is set to vote on two new picks to join the SEC as commissioners.

Lisa Fairfax, a Democrat, and Hester Peirce, a Republican, were both vetted by the panel in March. Both were nominated by President Obama in October to fill critical spots at the regulator, which has operated with just three people on the five-person panel since the beginning of the year. The Hill’s Peter Schroeder explains why Fairfax and Peirce could run into trouble if they hit the Senate floor: http://bit.ly/1qqsqVB.

HAPPY MONDAY and welcome back to Overnight Finance, where we’re embracing the return of the Senate but not the weather that has accompanied it. I’m Sylvan Lane, and here’s your nightly guide to everything affecting your bills, bank account and bottom line.

Tonight’s highlights include minimum wage pressure from Obama, a potentially surprising presidential prediction from economic models and a dire warning from the IMF.

See something I missed? Let me know at slane@thehill.com or tweet me @SylvanLane. And if you like your newsletter, you can subscribe to it here: http://www.thehill.com/signup/48.

ON TAP TOMORROW: The Senate Banking Committee will hold a hearing at 10 a.m. on consumer financial protection regulation. It will likely preview the questions for Consumer Financial Protection Bureau Director Richard Cordray, who testifies before the panel on Thursday.

OBAMA TELLS CONGRESS TO ‘STEP UP’ ON MINIMUM WAGE: President Obama on Monday praised two Democratic governors for hiking the minimum wage and bolstering paid leave in their states and called on Congress to do the same.

Govs. Andrew Cuomo (N.Y.) and Jerry Brown (Calif.) on Monday both signed laws to raise the minimum wage in their states to $15 per hour.

“Since I first called on Congress to raise the federal minimum wage in 2013, 18 states and the District of Columbia have acted on their own to raise the minimum wage. States and cities are making progress in expanding paid leave,” Obama said in a statement. “Now it’s time for Congress to step up and do what is right for every hard-working American and for our economy.” Here’s more from me: http://bit.ly/1MOFMVl.

IMF’S INSURANCE INDUSTRY WARNING: Insurance companies pose a larger risk to the financial system than they did before the financial crisis, according to the International Monetary Fund.

In a new report, the IMF found that the insurance industry, particularly life insurers, have taken on a more important role in the global financial system and are particularly susceptible to some economy-wide risks. As such, the international body recommended that governments keep a close watch on that sector and consider heightened rules on those firms: http://bit.ly/1RY3T6g.

GAS PRICES COULD FUEL DEM PRESIDENTIAL WIN: Low gas prices could give Democrats a third straight term in the White House, an economic election model said Monday.

The March Moody’s Analytics prediction shows that the Democratic nominee will win in November as long as prices at the pump stay low.

But without gas prices factored into the equation, the Republican nominee would have the edge. Vicki Needham tells us why: http://bit.ly/1q13seG.

…BUT OTHER MODELS PREDICT GOP VICTORY: Republicans are expected to win the White House under two economic models that have accurately forecast presidential elections for decades.

A third model run by Moody’s Analytics predicts Democrats will win the White House, in part because of President Obama’s rising approval rating.

The three models are being challenged like never before by the presence of GOP presidential front-runner Donald TrumpDonald TrumpOvernight Finance: New limits on offshore tax deals; ‘Panama Papers’ fallout ‘Panama Papers’ could boost prospects for corporate-transparency legislation Overnight Defense: Obama defends NATO from Trump MORE, whose campaign has shaken up politics: http://bit.ly/23bJJrj.

NIGHTCAP: Congrats to Illinois for becoming the state with the longest budget impasse.

Write us with tips, suggestions and news: slane@thehill.com, vneedham@thehill.com; pschroeder@thehill.com, and njagoda@thehill.com. Follow us on Twitter: @SylvanLane,  @VickofTheHill; @PeteSchroeder; and @NJagoda.

Overnight Finance: New limits on offshore tax deals; ‘Panama Papers’ fallout – The Hill}