President’s Tax Proposals Will Make U.S. Less Competitive

By May 4, 2009Economy, Taxation

The National Association of Manufacturers just issued a news release with NAM President John Engler’s reactions to President Obama’s proposals to gut deferral on foreign tax earnings. From the release, “NAM calls new taxes on corporate foreign earnings a ‘disastrous proposal’,” the following are direct quotes from Engler:

President Obama’s proposal to impose more than $100 billion in new taxes on corporate foreign earnings will destroy jobs in the United States and make U.S. companies less competitive globally.

The rhetoric on this issue fundamentally misrepresents the nature of global taxation and global competition. At a time when our economy is struggling and thousands of jobs are being lost every month, imposing an additional tax on U.S.-based international companies would put them at a massive disadvantage and cost American jobs.

Limiting deferral and further restricting foreign tax credits would simply increase the U.S. corporations’ tax bill based on their overseas operations, making them less competitive against their foreign-based competitors. In turn, the impact would fall hard on U.S. companies, their suppliers and their employees here at home.

Here’s the White House’s summary of what the President is proposing. And headlines:

Politically clever, perhaps, but divisive and counterproductive.

UPDATE (1:45 p.m.): A news release from the PACE Coalition – Promote America’s Competitive Edge — which includes the NAM and other major business groups, “PACE Coalition Seeks to Preserve a Level Playing Field for U.S. Companies Competing Abroad.”

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