I’ve written about this over the past few months, and a big tip of the hat to Sen. Carl Levin and his brother Rep. Sander Levin who have companion bills to stop so-called tax “inversions” (and another tip of the hat to Citizens for Tax Justice, which has been pushing the issues).

As Levin put it:

The issue we seek to address is known technically as “corporate inversion.” The details of inversions sound complex, but the principle is not. Inversion means avoiding potentially billions of dollars in U. S. taxes by changing a corporation’s address, for tax purposes, to an offshore location. What we have here is a tax avoidance scheme, an enormous loophole that allows companies to avoid billions in taxes without any significant change in where they operate, where their profits are generated, or the location of the executives who manage and control these corporations. A recent prominent example involves Pfizer, a U.S. drug company, and AstraZeneca, a U.K.-based competitor. This proposed corporate takeover – which Pfizer makes abundantly clear is largely about avoiding U.S. taxes – has gotten a lot of attention the attention, and for good reason. It would cost the United States about $1 billion a year in tax revenue. But this is not about just two companies. This is not about just one merger – even a merger that could shove billions of dollars in tax burden onto U.S. taxpayers. The Pfizer-AstraZeneca deal is just the latest example of abusive inversion deals. You cannot pick up a newspaper’s business section these days without reading about what Reuters has called “a wave of tax-driven overseas deal-making.” Some companies that believe in meeting their tax obligations are under competitive pressure to invert. It is clear that dozens, perhaps scores of companies are preparing to file their change-of-address cards, and in doing so, avoid billions in U.S. taxes. That burden doesn’t just go away. Either our remaining constituents must pick up the tab, or the loss of Treasury revenue adds to the federal deficit.[emphasis added]

More from CTJ:

The loophole in the current law allows the company resulting from a U.S.-foreign merger to be considered a “foreign” corporation even if it is 80 percent owned by shareholders of the American corporation, and even if most of the business activity and headquarters of the resulting entity are in the U.S.In theory, once a corporation is “foreign,” any profits it earns in the U.S. remain subject to U.S. taxes, but offshore profits are not. But inversion also makes it easier for a corporation to avoid U.S. taxes on its U.S. profits. This is because corporate inversions are often followed by “earnings-stripping,” which makes U.S. profits appear, on paper, to be earned offshore. Corporations load the American part of the company with debt owed to the foreign part of the company. The interest payments on the debt are tax deductible, officially reducing American profits, which are effectively shifted to the foreign part of the company.

And, so, now the president has seen the light. Just today in Los Angeles, he called for an end to tax inversions:

President Obama on Thursday called for Congress to strip away tax advantages that have encouraged a rush of mergers and acquisitions that give companies an overseas base while they maintain their presence in the United States.In an appearance at a technical college that was intended to focus on job training, the president used unusually harsh language to describe American companies that acquire overseas companies to relocate for tax reasons, known as inversions. He said they were renouncing their American citizenship by “cherry-picking” the nation’s tax laws at the expense of ordinary taxpayers.

“These companies are cherry-picking the rules, and it damages the country’s finances,” Mr. Obama said. “It adds to the deficit. It sticks you with the tab to make up for what they are stashing offshore.”

“I don’t care if it’s legal — it’s wrong,” he said, prompting the audience to boo the companies taking advantage of the practice.[emphasis added]

Welcome to the party, Mr. President. About time.And if these guys are smart, they’ll take this theme and bang it in every state where there is a close Senate race.