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Taxes: Walgreen, America's venerable drug-store chain, is thinking the unthinkable: relocating to Europe. Not because it sees growth and opportunity there, but because of onerous taxes here in the U.S. It's an ominous trend.

The Financial Times of London calls it "one of the largest tax inversions ever." That is, a company seeking to avoid punitive taxes in one market by moving to another.

No doubt the FT is right. And after its recent $16 billion takeover of Swiss-based Alliance Boots, it would be easy for Walgreen to remake itself as a Swiss company.

If it did, the Democratic Party's liberals would no doubt call Walgreen unpatriotic for wanting to lessen its tax burden. In fact, they are responsible for an economic environment so hostile to capital and investment that companies now find it intolerable.

As we've noted, corporate tax rates in the U.S. are the highest among the developed nations. The average rate in America in 2013 was 39.13%; for all of the Organization for Economic Cooperation and Development nations, it stood at 28.2%.

In short, being headquartered here is a major competitive disadvantage for American firms.

According to an analysis by UBS, Walgreen's U.S. tax rate is 37.5% — compared with Alliance Boots' rate in Europe of about 20%. That's a huge gap, worth billions of dollars a year.

But it's even worse than that. A recent OECD study says the "integrated tax rate" — taxes on capital and income — for U.S. companies is a nightmarish 67.8% vs. 43.7% for the OECD.

Many companies facing steep tax rates and insane regulations in the U.S. have had enough. They're keeping their profits overseas. Last week, Senate Finance Committee chief Ron Wyden, an Oregon Democrat, reported U.S. corporations now hold $2.1 trillion in earnings in overseas accounts — a massive amount, roughly equal to 12% of U.S. gross domestic product.

A total of 547 companies — including Apple, GE, Microsoft and Pfizer — have dramatically expanded their so-called foreign indefinitely reinvested earnings overseas, which let them avoid the punishing rates here at home.

"The new numbers ... certainly highlight what is one of the key challenges for tax reform," said Wyden. No kidding.

Wyden and his fellow Democrats will try to raise taxes even higher or gut foreign tax exemptions. If so, it will backfire. Companies won't invest here if government takes more of their money; they'll just find new ways to put it out of reach.

And why shouldn't they?

Not only are taxes too high, but also new laws such as Dodd-Frank and ObamaCare, a vast expansion of regulation, debt and the size of government, the federal takeover of entire industries, the bullying of Wall Street and demonization of CEOs, and forced CO2 cuts that will hammer manufacturers have made this the least pro-free market U.S. government in generations.

Eventually, a new Congress and president will get wise and reform our tax code, cut regulations, get government out of picking winners and losers, and end the war on entrepreneurs, business and investment.

When they do, that $2.1 trillion will come flooding back as investment in America. And the resulting boom, with millions of new, high-paying jobs, will make our current stagflation-malaise seem like a bad memory.