“One of the most insidious tax loopholes out there” just got a little smaller. But President Barack Obama, who announced the change on Tuesday with much fanfare, didn’t go nearly far enough: The tax code itself, not just its loopholes, is what needs fixing.

It’s hard to overstate just how bad the U.S. corporate tax code is. Imagine it was designed by foreign saboteurs – and prepare to be impressed by their ingenuity.

It taxes profits at 35 percent, one of the highest rates in the world. This excessive rate applies to a base riddled with exemptions and exceptions.

U.S. companies pay taxes on their non-U.S. earnings, but only when the money is brought home, thus creating an incentive to park profits abroad. In these and other ways, the system manages to combine maximum economic damage with relatively meager revenue collection. To avoid this tax, some U.S. companies have bought smaller foreign firms and switched their residence for tax purposes overseas.

These are the so-called inversions that new Treasury rules are intended to block. They may have already had an effect, with Pfizer’s termination of its $160 billion takeover of Allergan.

A sensible tax system would eliminate the incentives both for inversions and for parking income abroad. Actions like the administration’s shouldn’t be confused with reform.