Tax Loopholes or Good Policy?

Following up on his campaign promise, President Obama announced plans to change the US tax code to stop tax breaks that ship our jobs overseas. "The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries." He also called for more transparency in bank accounting in tax havens like the Caymans, to cut down on tax avoidance there. Can't argue much with that part, though it was fun to visit the Caymans shortly after The Firm was filmed and see a lot of filthy rich people, and even meet a few.

In a comment of supreme irony, Treasury Secretary Timothy Geithner complained of these "indefensible tax breaks and loopholes".

However, a paper by Mihir Desai, a professor at the Harvard Business School, argues that there is very limited evidence that current tax policy is a subsidy, nor does it ships jobs overseas. He argues that we should tax overseas activity less, not more. Selected quotes:

"Across Europe, firm level studies have found a positive association of foreign expansions and domestic employment"

"no negative effects on employment domestically of the decision by Italian, French
and German firms, respectively, to initiate production abroad"

"Japanese firms increasing their overseas activity increase domestic employment at rates that are three to eight percent greater than comparable purely domestic firms"

(in the USA) "10% greater foreign investment is associated with 2.6% greater domestic investment, and 10% greater foreign employee compensation is associated with 3.7% greater domestic employee compensation."

I have a few doubts, concerns and questions about the paper, for example, it could just be the more successful firms that can afford (or have the "vision") to do overseas investments, so naturally they still do better domestically, but it raises some interesting points. Chances of a rational discussion of this in the US Congress? 0.0001%.