Thank you Robert m. Kimmitt and Matthew J. Slaughter of the Deloitte Center for Cross-Border Investment for writing today’s op-ed in The Washington Post, “How to jump-start American manufacturing,” which examines the interaction of international business operations with the U.S-based manufacturing economy.

Despite the common assertion that U.S. multinationals simply “export jobs” out of the United States, these firms’ expansion abroad has tended to complement their U.S. operations. More international investment and employment in their foreign affiliates has tended to create more U.S. parent company investment and jobs as well. Our calculations from U.S. Bureau of Economic Analysis data show that from 1988 to 2007, employment in foreign affiliates rose by 5.3 million jobs — while U.S. parent companies added nearly as many positions, 4.3 million. A 2009 study published in the American Economic Journal: Economic Policy analyzed all U.S. multinationals in manufacturing from 1982 to 2004 and found that each additional dollar in an affiliate’s employee compensation generated, on average, an increase of about $1.11 in employee compensation at its parent company. Each additional dollar in an affiliate’s capital investment generated an average increase of about 67 cents in its parent’s capital investment.

In many U.S. multinationals, foreign and U.S. operations support and strengthen each other. A major reason for this is faster economic growth outside the United States. Rapidly growing countries present vast revenue opportunities for U.S. multinationals, opportunities that tend to boost affiliate and parent activity.

The piece is full of the facts and figures that effectively rebut claims about “shipping jobs overseas.” Unfortunately, in the House’s debate on Tuesday about H.R. 1586, which included $9.6 billion in higher taxes on U.S. companies with foreign operations, proponents of the tax increase barely addressed the issues raised in the op-ed. Instead we got rhetoric, slogans like “closing loopholes.

The truth is U.S.-based businesses with operations abroad and foreign-based businesses with U.S. operations create wealth, serve markets, and employ U.S. workers. The multinationals help us “Make it in America.”

The arguments in the op-ed — and thanks to the Post for publishing it — are aimed at the public and policymakers. Kimmitt and his colleagues at Deloitte have also examined related issues of international investment for their business clients, as piece published in June in Deloitte Review, “Money and Borders: Cross-Border Investments In A Changing Global Marketplace,” which reports:

There are indications that governments are becoming bigger players in economic affairs, and that we are entering an era in which nationalist ambitions will make globalization more difficult to manage. This has profound implications for cross-border investments. How far these trends will go and how they will affect particular industries and markets are open questions. What is clear is the need for companies and funds pursuing cross-border investments to adapt their investment strategies and operations to function effectively at the intersection of government, business and finance.

For more from Deloitte on the global economy, go here.

Earlier posts:

• Raising Costs of Global Business Undermines U.S. Job Creation
• Too Bad House Gave Short Shrift to Tax Competitiveness
• House Votes to Raise Taxes on Jobs Creators, 247-161
• You’ll Take the Money and Like It
• Manufacturers ‘Key Vote’ Against Tax Increases
• Accusing Companies of ‘Exploiting Loopholes’

The House had a full debate on the floor Thursday on H.R. 5893, the Investing in American Jobs and Closing Tax Loopholes Act. By “Closing Tax Loopholes,” supporters mean raising taxes on U.S. businesses with global operations, and the National Association of Manufacturers sent a Key Vote letter opposing the bill.

The final vote on the bill was postponed, postponed, and as the floor session continued into Friday morning, postponed. It was never held, and so far there’s no sign of a vote today, and the House is scheduled to leave soon for its August recess.

It may be that a majority of House members recognized that raising taxes on manufacturers and other businesses — jobs creators — is a terrible idea. Today’s Commerce Department announcement that second quarter 2010 GDP growth was just 2.4 percent, indicating a slowing recovery, should give Representatives further reason for restraint. (BLS news release, Los Angles Times, “Economy slows sharply in second quarter.”)

The floor debate on H.R. 5893 started on page H6355 of The Congressional Record. Rep. Dave Camp (R-MI), the ranking member of the House Ways & Means Committee, cited the NAM’s letter on page H6367.

UPDATE (10:45 a.m.): Rep. Camp just said the bill did not come to a vote because the Republicans had a motion to recommit that would have passed. The House is now debating H.R. 5982, which appears to be a bill that also has tax increases on businesses with overseas operations. Rep. Scott Murphy (D-NY) calls it the “Small Business Tax Relief Act,” says it would repeal the additional IRS 1099 reporting required under the new health care law. Bill was just introduced today.

The Wall Street Journal today covers the ins and outs of tax deferral, a critically important issue for businesses with an international presence, “Business Fends Off Tax Hit.” Under the U.S. global tax system, taxation of overseas earnings are deferred until those earnings are brought home to the United States. In May, President Obama detailed his plans to raise taxes on those earnings by using aggressively populist — and misleading — rhetoric about “companies that ship jobs overseas.”

As John Engler, president of the National Association of Manufacturers, said at the time:”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.” (NAM release; NAM Manufacts sheet on deferral.)

Today’s Journal piece details the response from the business world, taken aback that the Administration would propose such a tax increase during a recession and unhappy at the President’s repeated lumping together of “tax loopholes” and international tax policy. As Honeywell Chief Executive David Coate, an Obama supporter, said, “You can’t love jobs and hate those who create them.” Concern was especially high in the high-tech sector.

Companies ranging from Microsoft Corp. to General Electric Co. to International Business Machines Corp. put the topic at the top of their Washington agendas. Many CEOs and business lobbyists say the proposal — and the rhetoric used to push it — betrayed a tone-deafness on business issues among the president and his advisers. White House officials say the issue has often dominated discussions during meetings with CEOs.

And now?

Obama aides say the administration has set the idea aside for now, but may return to it as part of a broader tax overhaul sometime next year. The White House had billed the proposed change as an overdue fix to the tax code and potentially a key revenue-raiser.

“This has gone all of a sudden from red-hot to white-cold,” says Michael Klayko, chief executive of Brocade Communications Systems Inc., a large data-storage company. But he says he is concerned that if the proposed tax changes get entangled in the health-care overhaul, “it could go back to red-hot again.”

With federal deficit spending running at unprecedented (peace-time) levels, yes, the coals of revenue raising are probably only banked.

UPDATE (12:34 p.m.): JimPethokoukis of Reuters tweets, “Obama is dumping plan to hike corporate taxes by $20b a year. Why? 1) Dem-friendly techs screamed; 2) VAT ion its way so wait w/ big change”