Come January 20, a lot of Americans will miss some of the people in the current administration who have made our government run during the last eight years. I am among them. But unlike the millions who are lamenting the imminent departure of President Obama, my eyes will be trained on the building next door – the one with the statue of Alexander Hamilton on the south portico – the Treasury Department.
And the person who I will miss most is Bob Stack, Treasury deputy assistant secretary for international tax affairs. This is because for nearly four years, he epitomized the man Rudyard Kipling described in “If.” Stack has shown how to keep his head while all around him others are losing theirs, and he always kept the “public” in public service.
Over the past few years, the business world has been roiled by upheaval in the established order, following the global economic collapse that began in 2007. Much of that upheaval has been in international taxation. In that environment, companies have structured their affairs to take advantage of anomalies and inefficiencies in the global tax system, while governments have tried to stop them.
Those competing efforts have spawned a torrent of measures and countermeasures coming in rapid fire. They include corporate inversions and rules designed to stop them; artificial transfer pricing arrangements and European state aid investigations designed to penalize them; base erosion and profit-shifting structures and the OECD’s BEPS project, designed to minimize or eliminate them.
Throughout all this, government leaders have had to work with different – often competing – constituent groups, listening thoughtfully, taking action, and explaining their decisions. And that may be the toughest job on the planet.
On Stack’s watch, the U.S. Treasury has adopted rules to deter and penalize corporate inverters. As American corporations have accumulated nearly $2.5 trillion in untaxed offshore earnings, Treasury has proposed legislation to tackle the lockout effect. It has participated actively in developing the comprehensive set of BEPS recommendations adopted unanimously by the OECD and G-20. It has fought back against an assault on corporate tax planning from European Commission trade lawyers seeking to undo decades of well-established tax planning, under the claim they are fighting illegal state aid.
And through it all, Stack has acted in the best interest of the public he served. More importantly, he has consistently worked openly and acted with integrity, whether he has had the support or opposition of any particular group. In this political climate, that is a rare skill.
As he prepared to leave office, Stack talked recently about the state of international taxation. He was forthcoming about past achievements and shortcomings, and the challenges the world now faces. The comment that struck me most about Stack's lasting impact came not from him, but from a French businessman. Referring to Stack's advocacy against the state aid cases, the businessman said, “Who would have thought that a French company would have to rely on the U.S. Treasury Department to protect us from the European Commission?” Who, indeed. But when you serve the public interest like Stack, it’s all part of a day’s work. We will miss you, Bob.