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Michael Hiltzik on one of the most insidious American corporate activities of the New Gilded Age–moving their official operations abroad to nations with lower corporate tax rates while keeping all actual operations in the U.S. This is called an inversion and it is nothing more than rich people stealing money from the federal government.

Here, for example, is Heather Bresch, chief executive of the generic drug maker Mylan (and daughter of Sen. Joe Manchin III (D-W.V.), telling the New York Times, “You can’t maintain competitiveness by staying at a competitive disadvantage. I mean you just can’t.” The credulous Times quotes her as saying she entered into her inversion deal (by acquiring a European firm and moving the tax base to Holland) “reluctantly, and she genuinely seems to mean it.”

Uh-huh. Is Mylan uncompetitive? Over the last two years its sales have increased 12.7% and profits 16%; among its big competitors paying putatively lower taxes, British-based GlaxoSmithKline gained 3.14% in sales and 11.23% in profits, and Israel-based Teva’s sales gained 11% and its profits declined 54%. Israel’s top corporate tax rate is 26.5%, the equivalent top U.S. federal rate is 35%.

The use of inversions to avoid U.S. corporate taxes has moved onto the front burner in Washington in recent months. The wave seems to be picking up, and some of the candidates are very high-profile, including Walgreens and Pfizer. The Congressional Research Service recently identified 47 such deals in the last decade, many of them in the pharmaceutical industry. In the previous 20 years there were only 29. Conservatives use the trend as an argument for cutting or eliminating the U.S. corporate tax: If ours were as low as those of other countries, no one would have to flee, they say.

Well, we all know how impoverished the pharmaceutical industry is so one can understand why these 99%ers would make such a move. President Obama is trying to crack down on this. There is much that could be done, including creating separate and very high tax brackets for executives living in the United States or with American citizenship that hold stock or executive positions in companies that engage in such practices. You don’t have to take radical action. You just have to hit the executives where it hurts–their own personal pocketbooks and pride. Of course, that doesn’t mean it’s easy to do in this political climate.

Here is another, and probably more realistic, set of solutions:

Kleinbard proposes a three-pronged approach. First is to close a loophole allowing an American firm to declare itself foreign-owned if at least 20% of its post-merger shareholders are foreign. The threshold should be 50%, which would require inversions to be genuine foreign acquisitions. This would put the kibosh on many, if not most, pending deals. This change has been proposed by the Obama administration and introduced in Congress by Rep. Sander M. Levin (D-Mich.).

Kleinbard also advocates tightening up rules against earnings-stripping, largely by lowering the limit on how heavily a company can saddle its U.S. operations with debt. Finally, he suggests ending “hopscotch” maneuvers, through which an inverted company bypasses U.S. tax rules by advancing its offshore cash stockpile directly to the new foreign company.

The appeal to corporate morality is eye-catching enough. But rhetoric like this has limited effectiveness. The proper way to deal with corporate immorality is to wipe it out through the law.

“There is a breach of moral obligation and fiduciary duty here,” Kleinbard says. “The moral failing is the refusal of Congress to do the most fundamental kind of loophole-closing.”

In other words, the most effective comeback to “it’s legal” is this: “It was legal. But not anymore.”

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