The "corporate inversion" law being considered by the US Congress may have been declared dead, but that does not mean it won't come back to life.

That is because it is unlikely that the causes of the battle over the redomiciling of US corporations to offshore jurisdictions are still very much alive.

As long as the US economy remains weak, demand for taxes will remain strong, and the idea of US corporations moving their nominal headquarters abroad to reduce their tax bills will be a target for US politicians.

Much of this fight has been political, in part because this is an election year in which Democrats are looking for sticks with which to beat the Republican majority in the House of Representatives.

Then too, the issue has taken place at the same time as the wave of US corporate scandals. And with companies like Tyco and Global Crossing based in Bermuda, it is relatively easy to throw them all into the same basket of corporate wrongdoers.

For American lawmakers, this is a gift. There are no American victims, while the current anti-corporate mood in the US makes these companies an easy target.

For the same reasons, this has been a difficult issue to combat, not least because the US companies that are redomiciling are doing so purely for tax reasons.

Much now depends on what happens in next month's Congressional elections. If the Democrats hold their one-seat majority in the Senate and overturn the narrow Republican majority in the House, then anti-corporate inversion measures are almost certain to be contained in future legislation, which stands a good chance of passing unless President Bush vetoes it.

If the Republicans hold their House majority, it is likely that any changes will take longer to go into effect, but the changes will take place. However, instead of making Bermuda less attractive to US corporations, the emphasis will be on making the US more attractive so that companies will not feel the need to move in the first place.

That is what Bermuda has been arguing all along, although it has not done the Island much good in the short term.

How much does this matter to Bermuda?

In some ways, it is not that important, given that the companies that have been in the spotlight did not contribute that much to Bermuda anyway and had little or no physical presence. In that sense, ACE chief executive Brian Duperreault helped Bermuda's cause when he assailed the newcomers.

But in other ways, it matters enormously. After spending decades shedding the label, Bermuda is once again known as a tax haven. And the debate will also have built sympathy for US insurers and reinsurers who rail against Bermuda's flexible tax and regulatory structure.

That's important because unlike the Stanley Works' and Ingersoll Rands, the Bermuda-based insurers like ACE are Bermuda's economy now. They too derive tax benefits from being based in Bermuda, even if there are many more reasons for their being on the Island as well.

But politics demands sound-bites and simple explanations of complex subjects, so it much easier to accuse the companies of simply avoiding taxes.

That is why Bermuda should not assume that just because the current congressional session has passed with an anti-corporate inversion bill being passed, it does not mean that one will never be passed.

Government and international business leaders need to demonstrate to the US and to the rest of the world that it is a responsible business jurisdiction that exists to enable companies to be more efficient and successful, not just by virtue of lower taxes but because of the regulatory, georgraphical and infrastructure advantages that Bermuda has to offer.