Defect in U.S. tax law motivates companies’ overseas moves

A researcher trying to find ways to keep black bears away from humans once summed up the problem for me with a simple calculation: Animals are driven to obtain the maximum number of calories for the least amount of effort, and people leaving high-calorie food out attract the bears.

The same drive applies to executives and profits. Executives seek to maximize returns, for the least amount of effort. And American tax laws benefiting foreign-owned multinationals encourage them to merge with foreign companies and move offshore, a process called a tax inversion.

Expecting anything else, really, is going against nature.

The trick to keeping bears away from humans is to take the food away, and the key to stopping tax inversions is to take away the ability of companies to strip away their earnings and ship them overseas. Rep. Sander Levin, D-Mich., is circulating a draft bill called the "Stop Corporate Earnings Stripping Act" that would do just that hoping to attract bipartisan support.
August 5, 2014
Houston Chronicle