How tax inversions have helped the US economy

A contrarian opinion from Diana Furchtgott-Roth, considering some prominent liberals have called for corporations to take a loyalty oath (TheDailyBeast) in light of recent tax inversions:

U.S.-based multinationals face a federal corporate tax rate of 35% on worldwide income, not just income generated in the United States. State taxes are extra. America is one of only seven Organisation for Economic Cooperation and Development countries that taxes companies on worldwide income, and the others have significantly lower corporate tax rates.

The United States, in fact, charges the highest tax rate in the developed world. The average of OECD countries is 24%. Some countries, such as Ireland, have corporate tax rates that are closer to half that.

If a foreign-based multinational had headquarters in Ireland, and wanted to bring back $100 million to invest in its plant in Detroit, then all the $100 million would be invested. None would go to the Treasury. Residents of Detroit would be better off, and the shareholders of the company would be better off. America would grow because companies generally spend money more effectively than does the government.

Since inverting to Panama in 1982, McDermott International MDR +2.22% has created American jobs by constructing pipelines and oil platforms in the Gulf of Mexico and across the country. Panama’s lower corporate income tax rate, 25%, leaves McDermott with more funds to hire the workers to complete those projects.