The USA Today has a front page story promoting plans by Democratic presidential contenders Hillary Clinton and Barack Obama to end “a tax break they say encourages employers to ship American jobs abroad.” USA Today reports: “The Democrats, saying the United States has overlooked the costs to working Americans in its rush to embrace globalization, have vowed to eliminate any tax incentive for further offshoring.” But when we get to actual proposals here is what we find: Clinton “has not worked out every detail” of her corporate tax plan and that Obam has co-sponsored legislation that:
would give ‘Patriot Employers’ a tax credit equal to 1% of their taxable income if they maintain or increase the ratio of their U.S. workforce to the number of workers abroad, keep their headquarters in the USA and meet other wage, health care and pension requirements.
Obama spokesman Bill Burton explains: “Big businesses will always look for ways to skirt the tax code. An Obama administration will close loopholes and will tighten (IRS) enforcement so companies cannot go around tax regulations.” So apparently Obama plans to “simplify” the tax code by closing some loopholes while also creating new ‘patriotic’ ones. As USA Today notes, Obama’s proposed tax plan has drawn fire from “analysts who say it could be manipulated” by corporations. Ya, think.
The USA Today further reports: “The U.S. has one of the highest corporate tax rates in the world, and its corporate tax code has a well-earned reputation for complexity. But despite the high rate, the U.S. takes in less annual revenue from corporate taxes, measured as a percentage of economic output, than almost all other major economies.” This is not news to conservatives. The best way to encourage capital investment in the U.S. is to lower and simplify the U.S.’s bloated and complicates tax code.