US Treasury Secretary nominee John Snow may be more in favour of reforms to the US tax code rather than legislative proposals targeting corporate inversions, according to a leading political economist.

Andrew Quinlan, the president of the Center for Freedom and Prosperity and a vocal advocate of free market policy, yesterday told The Royal Gazette that he believed the White House, in looking at candidates for treasury secretary, would have sought someone with a leaning towards tax reform rather than punitive legislation.

And Mr. Quinlan said decision-makers, in nominating him to the post, would have taken into account Mr. Snow's thinking on such issues as corporate inversions.

Bermuda has been caught up in heated debate over the inversions since the beginning of the year as a wave of US companies - including Stanley Works, Ingersoll-Rand and Cooper Industries - sought to relocate to the Island.

The wave of American companies stated the move as a means of trimming taxes on their foreign-earned income but intense pressure from the media, trade unions and politicians pushed at least one company, Stanley Works, off their reincorporation plans.

On Monday President George Bush named Mr. Snow, a railroad executive, to replace Paul O'Neill after he tendered his resignation under pressure from the Bush administration. Mr. Bush was said in an AP news report to be “assembling a new economic team to aggressively sell a new stimulus package next year”.

Corporate inversions were already an issue on the Treasury's radar after it did a study of the business practice earlier in the year. That report called for action on the inversion front but also warned lawmakers against attempting to erect a “Berlin Wall” to stop companies from using the business transaction.

Mr. Quinlan said his organisation would continue to actively lobby against legislation that would put limits on a company's ability to shift their place of incorporation.

“There is more to this than just punishing a company, what we should be doing is asking why are corporate inversions taking place,” he said.

Mr. Quinlan, along with other free-market organisations, has called for a revamp of what he termed the “Draconian” US tax code to make it attractive for US companies to remain in America.

“We need innovative solutions not the old hackney of let's punish somebody as they are not following our way,” Mr. Quinlan said.

But Mr. Quinlan added that there had been too much pressure from media and legislators for the corporate inversion issue to die away. Already several legislators - including a vocal opponent of the corporate practice, Senator Charles Grassley - have vowed to reintroduce anti-inversion legislation in the new year.

Andrew Quinlan and another well-known free market advocate, Daniel Mitchell, will be on the Island tomorrow to speak at the Bermuda International Business Association (BIBA) annual general meeting at the Fairmont Hamilton Hotel from 12.30p.m.

Mr. Quinlan was formerly a senior staff member of the Joint Economic Committee and executive director of CapitolWatch, which is “one of the oldest and largest citizen lobbies in the US”, he said. And Dr. Mitchell is a McKenna senior fellow in political economy at Washington-based The Heritage Foundation, and reportedly an expert on tax reform, supply-side economies, international tax competition and Social Security privatisation.