This is the Cato Daily Podcast for Wednesday, August 27th, 2014.

I'm Caleb Brown.

Why do companies have operations overseas?

According to Ike Brannon of capital policy analytics

in the George W Bush Institute, companies want some mix of cheaper labor and

proximity to the markets they intend to serve.

Tax rates, of course, aren't irrelevant,

like in the case of Burger King choosing

to move to Canada.

Ike Brannen spoke at a Cato Institute

Capitol Hill briefing yesterday.

Why do we think U.S. companies operate abroad?

And I think that's essential question we need to understand,

to understand the current battle over inversions, and also how we tax U.S. corporations overseas income.

And I think there's two different schools of thought and the truth is really somewhere in between.

I think the White House's position is

that most companies that have overseas operations do so primarily to exploit

cheaper labor overseas.

On the other side, I would say most Republicans in Congress think that U.S. corporations

who have overseas operations do so in order to service local markets.

Like I said, the reality is somewhere in between, but your perspective on this issue colors

how you think we should tax overseas corporations.

...