Posted on 03/25/2004 8:22:15 PM PST by NormsRevenge
ASHINGTON, March 25 — Responding to widespread anxiety about the movement of American jobs overseas, Senator John Kerry plans to propose on Friday a sweeping revision of international corporate taxes intended to prompt companies to invest more money in the United States.
Aides said Mr. Kerry, the presumptive Democratic presidential nominee, would also challenge President Bush by saying his administration would spawn 10 million additional jobs over four years. Democrats often point out that more than two million jobs have been lost since Mr. Bush became president.
In a speech he is scheduled to deliver at Wayne State University in Detroit, a city that has been plagued by job losses in manufacturing, Mr. Kerry is to propose eliminating a major tax break on profits earned by American companies overseas and using that money to reduce the tax rate for all corporations.
"You know, economic plans aren't just about dollars and decimals — they're about choices," Mr. Kerry plans to say, according to excerpts of his prepared text provided by his campaign Thursday evening. "Time after time, this administration has put ideology first and jobs last. Today, I'm announcing a new economic plan for America that will put jobs first."
With voters saying that the economy is still the most important issue in the election, Mr. Kerry's speech is designed to begin a new economic policy offensive. It represents an approach that sounds some of the same notes as his frequent denunciation of "Benedict Arnold C.E.O.'s" during the Democratic primaries, yet is more sympathetic to business.
Kerry campaign officials said they hoped his proposal would appeal to people concerned about the loss of jobs to low-wage countries like China and India. But by advocating a crackdown on international companies but not an increase in the overall level of corporate taxes, the campaign is trying to avoid angering the business community.
"This is pure tax reform," said Gene Sperling, a top economic adviser to Mr. Kerry who also served as a senior policy adviser to President Bill Clinton. "He is eliminating tax incentives to move jobs overseas and using those funds to create incentives for new jobs and investment in the United States."
Steve Schmidt, a spokesman for President Bush's re-election campaign, denounced the proposals as "window dressing" and said that Mr. Bush supported a more comprehensive approach to job creation.
"John Kerry's proposal does not make the kind of fundamental reform that will make U.S. firms more competitive in the global environment," Mr. Schmidt said, adding that Mr. Kerry was "obstructionist" on job-creating engines like opening foreign markets, reducing regulation and lowering taxes.
On Thursday, Mr. Bush continued insisting that the economy was improving. "So we've been through recession, an attack, corporate scandals and war," he said at New Hampshire Community Technical College in Nashua. "And yet our economy is growing and getting stronger."
The essence of the Kerry plan boils down to two main elements.
The first would be eliminating the ability of American multinational companies to defer taxes on their foreign profits as long as those profits stay outside the United States. That would raise about $12 billion a year in extra tax revenue, which Mr. Kerry would use to reduce the overall corporate tax rate to 33.25 percent from 35 percent.
"If a company is torn between creating jobs here or overseas, we now have a tax code that has American taxpayers paying to ship jobs overseas," Mr. Kerry plans to say in Friday's speech. "That makes no sense. And if I am president, it will end."
Analysts on Wall Street have estimated that American companies have accumulated more than $400 billion in overseas profits, and multinationals are pushing for bills in Congress that would reduce taxes on foreign profits by as much as $37 billion over the next 10 years.
"The reason all that money is held overseas is because our international tax system does not prevent the double taxation of foreign source income," said John J. Castellani, president of the Business Roundtable, a lobbying organization that represents the chief executives of large corporations.
Many independent economists questioned Mr. Kerry's underlying assumption that the tax code plays a significant role in corporate decisions to set up factories overseas.
"My sense is that it is not usually the decisive factor," said Edward McKelvey, a senior economist at Goldman Sachs. "Normally, companies go offshore either because of cost reasons — labor costs, materials costs — or for market access reasons. Countries tell you that if you want to sell here, you need to be here."
Campaign officials acknowledged that the new plan would not stop the broader trend of outsourcing jobs to low-wage countries. But they said it would at least remove what they called a bias in the tax system that encourages such practices.
To sweeten his proposal for business, Mr. Kerry also borrowed an idea supported by many Republicans. In addition to reducing the corporate tax rate, the plan would give American multinational companies a one-year "tax holiday" under which they could bring their accumulated foreign profits back to the United States at a tax rate of only 10 percent.
Economic advisers to Mr. Kerry said the tax holiday would actually lead to a short-term windfall in tax revenues, because companies would have a special incentive to bring back hundreds of billions of dollars that have been sitting untaxed overseas.
Under the plan, the government would use that windfall to pay for a two-year tax credit to companies that create new jobs.
What the hell does that mean? Make fuel?
If this does not show bias in the media nothing does. A proper rewrite would read: On Thursday, Mr. Bush continued to point out that the economy is improving.
It is not just Bush's opinion that the economy is improving, as the reporter has presented it. It is as if the reporter could not bring themself to write into their story a fact that is a point in favor of Bush.
"Down with Outsourcing!" *slobbers*
It might be a smart move politically but it is bad policy for the country.
Company USA, (a U.S. Company) manufacturers in China and sells to another country, let's use Japan as an example. A competing company, Company EU (from Europe) also manufacturing in China sells a similar item to Japan. Both companies are cost competitive and take a aggressive sales approaches that keep margins tight.
Along comes Kerry's tax those dirty overseas U.S. companies that have sent U.S. jobs overseas.
Faced with higher costs in the form of higher taxes and low margins due to a competitive sales environment, Company USA must raise prices. Company EU gains a competitive advantage and market share.
As far as I know, Bush has not moved one factory out of this country because he is not the owner of a single factory.
That cannot be said about Kerry and his wife, Teresa Heinz-Kerry. According to the Wall Street Journal, the Kerry’s own 32 factories in Europe and 18 in Asia and the Pacific.
In addition, their company, the Heinz Company, leases four factories in Europe and four in Asia. Also, they own 27 factories in North America, some of which are in Mexico and the Caribbean.
Kerry demands that other companies that relocate should pay the same benefits they did in the U.S. Why does he not demand this of the Heinz Company, since he is married to the owner?
If Kerry is elected, will he and his wife close all those foreign factories and bring all those jobs back to America? Of course they won't. They're making millions off that cheap labor.
When John Kerry raises taxes on the "rich"- i.e. $200,000+ per year; which is 3/4 of the small business owners in the U.S., it is going to cause business closures, job loss, and price hikes. $200,000, plus the death tax, plus this tax or that tax; it is going to hurt you. It's not going to help you. He is not going to give the money to you, but you will surely bear the cost. That's before we talk about the stock market reactions to these tax hikes, or any other effects. What will 100 days of Kerry really look like?
And, in case you haven't noticed, is just about the ONLY issue that has RIVEN the Conservative Base.
"When they came for the Unionized Factory Worker, I did not complain because I was not a Unionized Factory worker, and when they came for..."
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