The new rules of the Treasury regarding inversions, stopping them, have made politicians happy, but they don’t mean well as far as the businesses are concerned.
Just for a quick review, an inversion happens when a company of the United States buys out a small firm from another country with shareholders still having in control of around 20% of interest on the business. When the buyout happens, it is part of the rule that the headquarters will stay in the foreign address with the newest majority of shareholders take more control of the company. The opinion of politicians is that an inversion is only looked at by businesses as a way to avoid taxes in the U.S. and lean towards a country which has a friendlier tax code.
The truth in this popular myth is that business actually doesn’t do it just to get away from paying taxes but only for them not to be taxed twice-on in the U.S. and the other on the foreign country.
The bottom line is that the Treasury sees the stop to inversions as a solution which may prove so, but if the country wants to have more investments in America, this isn’t the way that it will get what it wants. The treasury might only appear like it is trying to scare lawyers and companies away.