Why Corporate Inversions Are Irrelevant To Us Tax Policy

Bogenschneider argues that inversions result primarily from shareholders' inability to replace ineffective corporate management under Delaware corporate law. He contends that the new theory of capital ownership neutrality is based on the counterfactual assumption of fixed capital investments by U.S. multinationals, and not marginal capital investment by a growing company, which is already tax deductible. Bogenschneider also observes that U.S. multinationals typically operate with effective tax rates equal to or less than those of foreign multinationals.