An issue that has created significant waves this past summer is the massive expansions of companies seeking refuge from the U.S. corporate tax code by reincorporating overseas (commonly referred to as “inversion”). There appears to be consensus among both Republicans and Democrats that this systemic problem with the tax code that requires comprehensive reform. However, for the moment both sides seem more concerned with playing politics than doing what is in the best long-term interest of the country.
The United States has the most antiquated corporate tax structure in the developed world. This problem has already cost Americans $2 trillion, and it is clear that a “band-aid” approach that will sweep the problem under the rug and waste the significant momentum created this summer by the string of inversion announcements by corporations that employ hundreds of thousands of American workers.
The best course would be to use the political will on both sides of the partisan aisle to commence a conversation about real, meaningful, comprehensive tax reform—reform that America desperately needs. Grandstanding about companies moving their headquarters overseas is just that, especially if it lacks a real proposal to establish a tax system that will encourage companies to move to the U.S., rather than away from it. Without that, these inversions will continue and the American economy—especially American workers—will be worse off for it.
