Obama's corporate tax "reforms" make a bad situation worse.
President Barack Obama is very insistent on the need to “save American jobs.” The spending and the Buy American provisions of his massive stimulus package, approved by Congress in February, were meant to “create or save” millions of U.S. jobs. “Saving jobs” was also the stated goal of his recent pledge to eliminate tax advantages for companies that do business overseas. But instead of saving American jobs, Obama’s new corporate tax is apt to worsen what is already the highest unemployment since 1983 and make America’s companies even less competitive in the global marketplace.
Last spring, partly in response to the anti-bailout tea parties that were sweeping through the country on and around the April 15 tax deadline, the president announced that he plans to simplify the tax code. That sounds like a worthwhile goal, but it turns out that forObama, simplification means taxing previously untaxed income.
For instance, the proposal targets what executives consider to be a lifesaving feature of an otherwise depressing corporate tax code: permission to indefinitely defer paying U.S. taxes on income earned overseas. According to the Obama administration, this practice keeps $700 billion or more of American corporate earnings in overseas accounts, beyond the taxman’s reach.
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