Monday, May 04, 2009

Shot across the bow from President Obama

From the LA Times -
President Obama said this morning that he plans to crack down on American companies that legally avoid U.S. tax obligations by investing money in countries with lower tax rates.

He also plans to eliminate tax deductions for companies that achieve similar breaks by sending jobs overseas, while extending the deduction for those who create domestic jobs.

The full White House press release is here.

K Street lobbyists and their future employees Republican allies in Congress are certain to start screaming "tax hike!" and "it will cost American jobs!"

A couple of quick points (for now. This topic is going to stay in focus for a while, so there will be more discussion of it later.) -

1. Closing loopholes is *not* a tax hike, and all President Obama is proposing is closing the loopholes that corporations use to avoid paying U.S. taxes on the profits they make in the U.S.

2. We are losing jobs already - many of the tax breaks targeted by the President reward companies for moving jobs overseas.

Speaking as someone who has lost two jobs already because of offshoring, I have no problem with this proposal.

None at all.

If companies want to move their operations/jobs overseas, that's their prerogative. However, they have no right to expect that the American taxpayers that they are screwing over laying off will subsidize such moves with their tax money.


1 comment:

Thane Eichenauer said...

Increasing the (hoped for) tax impact is *not* a tax hike.

I say you protest too much.

The problem isn't that US corporate tax laws aren't written correctly, the problem is that the US government is just plain ol' spending too much money.