Easily circumvented.
Greenberg ’16 [Scott; July 5; business & franchise speaker, author of multiple books; “Tax Proposals in the 2016 Democratic Platform, Explained,” Tax Foundation, https://taxfoundation.org/tax-proposals-2016-democratic-platform-explained-part-1/]
The U.S. tax code levies a higher tax burden on companies headquartered in America than on companies headquartered in other countries. It is relatively easy for a U.S. company to change the location of its headquarters, by having a foreign company purchase its shares or assets. This process is known as an inversion, and more than 20 U.S. companies since 2012 have used this maneuver to move their headquarters abroad and lower their U.S. taxes.
Since inversions became more popular a few years ago, many Democratic lawmakers have decried the trend (Clinton has gone so far as to call the practice a “perversion”) and offered targeted measures to penalize companies that invert. Republicans tend to treat inversions as a symptom of larger problems with the corporate tax system, and argue instead for broader reforms.
Clinton and Sanders have both proposed numerous measures that would target companies that engage in inversions. The Clinton tax plan would categorize any companies with more than 50 percent U.S. ownership as domestic businesses, and would require companies leaving the U.S. to pay an “exit tax” on their tax-deferred profits. Sanders’ plan would redefine “domestic business” to include foreign companies that acquire U.S. businesses. The Democratic platform does not choose between one approach or the other.