America’s high corporate tax rate is prompting some companies to implement a corporate inversion, defined by Investopedia as the process of “[r]e-incorporating a company overseas in order to reduce the tax burden on income earned abroad.” Barack Obama has slammed CEOs for using this “unpatriotic” maneuver, while at the same time ignoring calls to lower the U.S. corporate tax rate, the highest in the world. Andrew Ross Sorkin of The New York Times argues that solely reforming the corporate tax is meaningless because most U.S. companies don’t actually pay the designated rate anyway. Based on a new study by University of Southern California professor Edward D. Kleinbard, Sorkin writes, “Professor Kleinbard contends that most United States multinational companies don’t pay anywhere near 35 percent. Companies paid, on average, 12.6 percent, according to the Government Accountability Office, which last measured it in 2010, by deliberately stashing piles of cash abroad.” Isn’t that, well, kind of the point? As economists Stephen Moore and Arthur Laffer point out, “The corporate tax raises $250 billion per year, or 1.5% of GDP, which is one of the lowest tax revenues in the world.” Which raises the question: Why do we have this business-stifling tax anyway? More…