President Obama has called out "corporate deserters" for using foreign acquisitions to move their company headquarters offshore. He even sent Treasury Secretary Jack Lew in search of congressional support for legislation on the issue. But the fact is that there's little or no chance of such action before the November elections or even in the near future.
Maybe the issue just doesn't resonate with the electorate. Warren Buffett, who has supported the president in other areas in the past, has defended Burger King's (BKW) announced acquisition of the Canadian chain Tim Hortons (THI) , the air basically went out of the Obama administration's anti-inversion balloon.
The only strategy left for the administration is to issue executive orders. President Obama is expected to announce some kind of action as early as this week to limit tax inversions. There are questions about whether or not the administration has the authority to make such executive orders. Most everyone agrees, Republicans as well as Democrats, that there is a problem with the corporate tax laws and tax reform is needed.
However, the approach taken by the Obama administration was ill-conceived and relatively short on content because of the nature of the effort. The administration saw tax inversion issue as a possible issue that would excite the Democratic Party base and provide needed votes in the fall election.
The concern now is whether the administration's efforts to make this a fall election issue has caused a more deliberative treatment of tax reform to be put off until further into the future.
Most experts agree that any executive actions taken by the president to limit the tax inversion problem will fall far short of what needs to be done.
Furthermore, any kind of executive action taken by the president will not be looked on favorably by Republicans in Congress and will only make it more difficult to create an environment to do the hard work that needs to be done to achieve really effective tax reform.
An unintended consequence of the effort by the Obama administration to make the tax inversion issue into a political point in the fall elections may be to postpone the real tax reform that is needed. This, as I have written about before, could create more incentives for investors to take advantage of the international disparity of tax rates.
Such a possibility is one thing that politicians don't really consider -- the economic incentives that are created for investors when Congress focuses on short-term political benefits for themselves.
At the time of publication, the author held no positions in any of the stocks mentioned, although positions may change at any time.
This article is commentary by an independent contributor, separate from TheStreet's regular news coverage.