Fights between Congress and companies are nothing new. Companies want to maximize profits; Congress often feels like that's at the detriment of the country. But the squabbles don't often involve family members.

Until now.

Manchin

Source: Senate.com

Turns out the Democrat Senator from West Virginia, Joe Manchin, is the father of Mylan CEO Heather Bresch.

The same Mylan that recently announced a deal to acquire Abbott Labs' developed market drug business. The acquisition -- technically structured as a merger -- will set up a company in Netherlands with the overseas assets from Abbott and all of Mylan, allowing Mylan to move its official headquarters to Netherlands and pay less U.S. tax. Of course, it'll be a new Dutch company in name only; the current Mylan management will run the new entity out of Pittsburgh.

While it's all perfectly legal at this point, Manchin isn't too fond of the idea of U.S. companies pursuing tax inversions to lower their tax rates. "I think basically inversion should be absolutely repealed. All of them," he told the National Journal. That would include his daughter's announced deal.

I bet Thanksgiving dinner is going to be fun this year.

Fiduciary duty

Bresch

Source: Mylan

Of course, Bresch wouldn't be doing her job if she didn't try to maximize profits. That includes lowering expenses anyway possible, including paying less tax.

Companies aren't citizens. They have no loyalty to any country. Their only allegiance is to their owners, the shareholders.

Abbott's CEO Miles White doesn't have any relatives in Congress that I know of, but he should equally be applauded for the deal. While the assets are certainly useful for Mylan, helping make it more of a global player, the generic-drug maker was presumably willing to pay more for the assets because they allowed the company to save money down the line. If a company is willing to pay more for assets than the owner values them at, it's in the best interest of the owner to sell the assets.

The higher tax rates that American companies pay put them at a competitive disadvantage when there are foreign companies working in the same space. And in a global industry like pharmaceuticals, a few percentage points of decreased earnings can affect a company's cash flow and ultimately the ability to grow its business.

Mylan, of course isn't the only drug company to do a tax inversion. AbbVie is buying Shire to help lower its taxes. Ditto for Salix Pharmaceuticals and Irish drug developer Cosmo Pharmaceuticals. Ireland-based Elan capitalized on the trend twice, splitting itself in half with its drug formulation business going to Alkermes and the rest to Perrigo, facilitating both companies' moves overseas.

And the list could go on and on.

Of course, companies can avoid U.S. taxation by leaving cash earned in other countries overseas, but that only encourages an ultimate move to pursue tax inversions because a foreign purchase is a good use of all that cash stored overseas. And as more companies move overseas to lower their tax rate, there's more pressure for the remaining U.S. companies to follow suit to stay competitive.

What's an investor to do?
While I think the argument for management is pretty simple -- as long as it's legal, they should do whatever helps maximize value for shareholders -- the question for investors isn't as straightforward.

There's certainly nothing wrong with investing in foreign companies. It can add diversification, especially if the companies are dependent on economies outside the U.S. It's hard to argue that's un-American.

But should investors avoid buying a company that moved outside the U.S. to avoid paying taxes?

Mark Cuban thinks so. He sent out this tweet last month. 

Cuban argues that taxes the companies avoid paying have to be made up by the citizens. While that's technically true, my guess is most investors come out ahead with profits from increasing share prices (due to increasing corporate profits) exceeding the extra taxes they have to make up. 

I certainly wouldn't fault anyone for avoiding companies that have done tax inversions; it's really no different than avoiding companies that move jobs overseas. If that's how you want to show your patriotism, more power to you.

Just realize you're giving up potentially good investments. Mylan is arguably a much stronger company post-tax inversion. With low margins on generic drugs, bigger is almost always better. And the tax inversion will help lower its tax rate from 25% to the high teens after the deal is complete.

Of course, as Cuban points out, there are a lot of investment choices out there.

Editor's Note: A previous version of this article referred to Mr. Manchin as the Democratic senator from West Virginia. The Fool regrets the error.

Brian Orelli and The Motley Fool have no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.