When it comes to business, most companies will choose their bottom lines over patriotism — it is simply the reality of today's economic environment. Global competitiveness, economic prosperity and smart money management are prioritized over paying a premium for an American Zip code, which is why we continue to see corporate giants relocating to greener economic pastures without a second thought.

Inversions — simply stated — take place when businesses relocate their headquarters outside of the United States through an acquisition. They allow companies to pay the corporate tax rates of their new home country, potentially saving them millions of dollars.

Unfortunately for us, the most recent example of this corporate maneuver is happening in our own backyard.

Johnson Controls — our state's largest public company — has called southeastern Wisconsin home for more than 130 years. But recently the company announced its acquisition of Tyco International, and subsequent relocation to Ireland. The company will presumably take hundreds of jobs and certainly millions of tax dollars along with it — putting a significant dent in the national economy and dealing a huge blow to our local and state economies.


Although Johnson Controls has publicly stated that the merger's production of an estimated $500 million in annual savings is the main reason for the acquisition and relocation, it's impossible to ignore the massive tax savings of the decision and naïve to think it had no bearing on the company's final decision.

The situation playing out in Wisconsin isn't unique. Over the past few years, American companies have increasingly sought refuge from our burdensome corporate tax code. So much so, in fact, that the United States Department of the Treasury released new rules in late 2014 to curtail inversions and keep tax dollars flowing. However, the measure did little to prevent companies from relocating to foreign tax havens. According to the Wall Street Journal, "the Johnson Controls-Tyco deal is at least the 12th inversion pursued by American companies" since the Department of the Treasury implemented the new rules.

Despite the negative effects the departures of these companies are having on the American economy, it is difficult to blame corporate leaders when you crunch the numbers. The current rate paid by American companies is 35% — the highest corporate tax rate among developed countries. Plainly stated, this is unacceptable and is causing serious problems for this nation.

Looking specifically at the Johnson Controls-Tyco merger, Johnson Controls will stand to adopt Ireland's 12.5% tax rate upon relocation. As noted in a recent Wall Street Journal article, the company would save "at least $150 million a year on taxes over the first three years." It is difficult to argue against massive savings such as these, which is why it's urgent that Congress take on serious and comprehensive tax reform.

The discrepancy between our corporate tax rate and those of competing countries is alarming. In a competitive global economy, the United States cannot afford to lose American-built businesses due to our overwhelming and burdensome tax code.

We must simplify the tax code, close loopholes, and cut tax rates — that is the only way to be competitive in the international market and keep our businesses here in America. Additionally, a simpler, more efficient tax code also may entice foreign companies to relocate here, turning the tables on our competitors and enhancing our local and national economies.

Over the past few decades, our tax code has been increasingly used as a political tool, making real reform a difficult proposition in Washington. However, with the economic prosperity of our nation hanging in the balance, it is imperative we turn our attention to finding serious solutions that will not only help our businesses, but also individual citizens.

Reforming the tax code is necessary for the continued success of our nation. We've seen the consequences of kicking the can down the road, and here in Wisconsin we're experiencing the devastating effects of out-of-control tax rates. Although we cannot prevent Johnson Controls from leaving, through true reform we can avoid losing additional companies to competing nations.

We must take swift action and protect our economy, our jobs and America's long-term economic prosperity.

You can view this online here.