Democrats seek corporate tax change, but benefits unclear

Marketwatch ^ | Feb. 26, 2008 | Robert Schroeder, MarketWatch

[Ernest_at_the_Beach]

WASHINGTON (MarketWatch) -- Attention U.S. companies: If you "ship jobs overseas," a Democrat is going to try to bring them back.

As Hillary Clinton and Barack Obama take their battle for the Democratic presidential nomination to manufacturing states including Ohio and Pennsylvania, the senatorial rivals are both touting plans to bring change to the corporate tax code. Namely, "ending tax breaks for companies that ship jobs overseas."

That's how Sen. Clinton, D-N.Y., puts it in her campaign literature. Obama's language is virtually identical.

Clinton and Obama don't go into many specifics. But they're both taking aim at a decades-old part of the U.S. tax code that allows companies to defer paying U.S. taxes on earnings made in foreign countries until those earnings are brought back to the U.S.

Clinton argues that money reaped from ending tax breaks for American companies with operations abroad could be used to invest in the U.S. economy. Obama, D-Ill., suggests that tax breaks could be extended to companies that create "good jobs with decent wages here in America."

Manufacturers have historically supported the foreign earnings deferral as a way of leveling the playing field for U.S. companies doing business overseas. Most foreign countries only tax income earned within their own borders but the U.S. taxes income wherever it's earned by American companies. The deferral was enacted to mitigate the pain of "double taxation," that is, a company's profits being taxed both by the U.S. and the foreign country in which it's earned.

[HawaiianGecko]

"ending tax breaks for companies that ship jobs overseas."

/Start Sarcasm/  Now that's a good way to get companies back into the American fold, just make their cost of doing business here even more expensive!  /end sarcasm/   .... /start reality/  PUTZES! /end reality/

[ari-freedom]

the way to keep companies is to give them more economic freedom, not more strings attached.

[UCFRoadWarrior]

A better idea would be to give tax breaks to US companies who hire and manufacture in America...and end subsidies (like USAID) to companies who refuse to stay in America.

No need for new taxes....give breaks to pro-American companies, and end subsidies for anti-American companies

Another dagger in John Sidney McCain.....his support of liberal free trade policies will hurt him in states where he could have garnered conservative working-class Democrats

And the ones always claiming “McCain needs to reach to moderates” isnt happeneing, either