At the intersection of runaway corporate greed, the cold-blooded profiteering of pharmaceutical companies, and the generations-old, self-inflicted, crippling regulatory impotence of the U.S. government, the pending inversion of Phizer is dancing a little jig in a leprechaun costume and taking a steaming dump on the American flag.

So, inversions. Say a big U.S. corporation has already used up all the other tricks for avoiding paying taxes to our government. Here’s another neato trick they can pull: they can “merge” with a foreign-owned company—even a much smaller company—and, because they have been absorbed into this other company, they can now be headquartered wherever that other company calls home. Now, because they are no longer an American company, they pay corporate taxes to their new home country, where the corporate tax rate is substantially lower.

Voila! Just like that, an American company gets out of paying corporate taxes in America, because rinky-dink Sven’s Totally Not Fake Company LLC came on board. Sorry, Americans! It can’t be helped!

This is a thing the U.S. Treasury Department would like to stop. On Thursday, they unveiled a new set of rules designed to make tax inversions harder to pull off. Current laws, for example, say that such a merger cannot take place if shareholders of the U.S. company own more than 80% of the combined company, according to the Wall Street Journal—the counter-strategy is apparently known as “stuffing,” “in which the non-U. S. company is artificially made bigger before a merger to comply with that 80% threshold.” These inversions are not done with even a token veneer of legitimacy—everyone knows what’s coming and watches it in realtime.

The proposed new rules, though, are bullshit, according to a report from Fortune. The rules say the merger’s no good if the two companies relocate their headquarters anywhere but one of their home nations. So, flimsy tax havens are out, but businesses in nations, like, say, Ireland, that have low corporate tax rates, can make like internet startups and come into existence with the expectation of later merging with a larger U.S. company. Treasury’s rules make “stuffing” harder, but not impossible:

The Treasury’s inversion rules relate to deals in which U.S. companies end up owning between 60%-to-80% of the newly formed company, and the foreign entity owns somewhere between 40% and 20%. The idea was to stop U.S. companies from cheaply picking up small companies just for tax purposes.

[...]

“Every tax saving stunt that’s known to man is going to be available to them as long as they stay below 60%,” says Robert Willens, an independent tax expert.

Pfizer, recently the “largest pharmaceutical company in the world in terms of revenue,” tried to execute an inversion with a British pharmaceutical company in 2014. The deal fell through, but not before rousing Congress into action to hammer out a way to deter inversions. This action took the form of a bill—the not-very-subtly named Stop Corporate Inversions Act of 2014—which died in committee by January of this year.

Pfizer, undeterred, is back at it. They’re working on a deal with an Irish company called Allergan that would make Pfizer an Irish company, reports The Guardian.

The pending merger, reported on Friday by Reuters and confirmed on Sunday by the Wall Street Journal, could be announced as early as Monday. Forming a company worth more than $150bn, the deal would allow Pfizer to re-domicile from its headquarters in New York to Ireland, where Allergan is based in Dublin. With the move, the new company would cut its corporate tax range from 15% to 39% in the US to 12.5% in Ireland.

[...]

The inverse nature of the pending deal is illustrated by the fact that although on paper Allergan will be buying Pfizer, the current CEO of Pfizer, Ian Read, will head up the new merged entity, with the CEO of Allergan, Brent Saunders, acting as his deputy. Allergan is much the smaller of the two companies.

Treasury’s new rules will not prevent this from going down. They go as far as they can go without an act of Congress, according to a report from U.S. News & World Report:

Treasury Secretary Jacob Lew said, however, there is only so much the administration can do to prevent U.S. companies from pursuing the maneuver, known as a tax inversion. He again urged Congress to pass legislation.

“Our actions can only slow the pace of these transactions. Only legislation can decisively stop them,” Lew told reporters on a conference call.

Congress, of course, is a disaster. The Stop Corporate Inversions Act of 2014 never even made it to a vote. The Stop Corporate Inversions Act of 2015 was sent to committee in January and hasn’t been heard from since. Republican lawmakers, as per usual, say the answer to all this is to is pay off these corporate tycoons—in the form of slashing the corporate tax rate—in exchange for them not fleeing the country and taking their ball with them.

While they wait out that strategy, they’re preemptively shifting blame for their inaction to, who else, President Obama:

Senate Finance Committee Chairman Orrin Hatch, R-Utah, said that approval of legislation in Congress will require “stronger leadership from the White House to force a bipartisan compromise” between Republicans and Democrats.

The Pfizer merger would bring together the makers of Botox and Viagra, and would be the largest inversion yet completed.

[Guardian] [Wall Street Journal] [Fortune] [Forbes] [U.S. News & World Report]

Image via AP