Corporate inversions let businesses invest more in the U.S.

See the WSJ editorial Medtronic's Tax Inversion Lesson. Excerpts:

"The Minneapolis-based medical technology firm currently holds $13 billion in cash abroad. But this Medtronic money is all subject to extra taxation once it crosses the U.S. border, unlike the Covidien money, which can be brought to the U.S. and invested without penalty. The same penalty-free investing goes for all of Covidien's cash flow in the future."

"The U.S. is one of only six OECD countries that imposes on its businesses the world-wide taxation of corporate profits. Every company pays taxes to the country in which profits are earned. But U.S. companies have the extra burden of also paying the IRS whenever those profits come back from the foreign country into the U.S."

"a foreign company can choose to invest in the U.S. without penalty, but U.S.-based Medtronic would pay hundreds of millions and perhaps billions in additional taxes if it wanted to bring overseas profits back to its home country."

"Keep in mind that the money invested in corporations was once earned by someone who paid taxes on it. And it will be taxed again as dividends or capital gains. The point is that the U.S. government wants to tax U.S. business profits far more than other countries do."

"There is no point to inversion unless a company wants to spend its cash in the U.S."

"Kyle Pomerleau of the Tax Foundation notes that even if you believe the analysis from Congress's Joint Committee on Taxation that implies inversions will cost the government about $19 billion over 10 years, "This is compared to the $4.5 trillion the corporate income tax will raise over the same period. That is 0.4 percent of our corporate tax base due to inversions.""