Text 2 Economic refugees have traditionally lined up to get into America.lAtely,they have been lining up to leave.In the past few months,half a dozen biggish comparues have announced plans to merge with foreign partners and in the process move their corporate homes abroad.The motive is simple:corporate taxes are lower in Ireland,Britain and,for that matter,almost everywhere else than they are in America.In Washington,D.C.,policymakers have reacted wiLh indignation.Jack Lew,the treasury secretary,has quesLioned che companies'patriotism and called on Congress to outlaw such transactions.His fellow Democrats are eager to oblige,and some Republicans are willing to listen.The proposals are misguided.Tightening the rules on corporate"inversions",as these moves are called,does nothing to deal with the reason why so many firms want to leave:America has the rich world's most dysfunctional corporate-tax system.It needs fundamental reform,not new complications.America's corporate tax has two horrible flaws.The first is the tax rate,which at 35%is the lughest among the 34 mostly rich-country members of the OECD.Yet it raises less revenue than the OECD average ihanks to countless loopholes and tax breaks aimed at everything from machinery investment to NASCAR race tracks.Last year these breaks cost$150 billion in forgone revenue,more than half of what America collected in total corporate taxes.The second flaw is that America levies lax on a company's income no matter where in the world it is eamed.In contrast,every other large rich country taxes only income eamed within its borders.Here,too,America's system is absurdly ineffective at collecting money.Firms do not have to pay tax on foreign profits until Lhey bring them back home.Not surprisingly,many do not:American multinationals have some$2 trillion sittiry;on their foreign units'balance-sheets,and growing.All this imposes big costs on the economy.The high rate discourages investment and loopholes distort it,because decisions are driven by tax considerations rather than a project's economic merits.The tax rate companies actually pay varies wildly,depending on cheir type of business and the creativity of their lawyers:some pay close to zero,others the fuU 35%.But as other countries chopped their rates and America's stayed the same,the incentive to flee grew.A possible solution is to lower the corporate rate,eliminate tax breaks and move America from a worldwide system to a territonal one.
Many corporations decide to withdraw from America because of_____
A.low corporate tax rate
B.enormous tax pressure
C.intense domestic competition
D.numerous economic refugees
