Obama says tax code rewards firms for shifting jobs overseas
By Jessica Chau
PolitiFact rates President Obama’s statement about tax breaks for companies that move jobs overseas; and NPR looks into Gov. Romney’s job plan.
During the debate, Obama tried to score points on Romney by highlighting the tax breaks companies get when they move jobs overseas.
“When it comes to our tax code, Gov. Romney and I both agree that our corporate tax rate is too high, so I want to lower it, particularly for manufacturing, taking it down to 25 percent. But I also want to close those loopholes that are giving incentives for companies that are shipping jobs overseas. I want to provide tax breaks for companies that are investing here in the United States.”
Romney responded, “The idea that you get a break for shipping jobs overseas is simply not the case.”
In this fact-check, we’ll examine the president’s statement and ask if there are tax incentives for companies that set up foreign operations.
NPR, John Ydstie, 10/9/2012
Mitt Romney says he has a plan with 59 bullet points detailing how to boost growth and job creation. He gives a short list in one of his most recent ads:
“First, my energy independence policy means more than 3 million new jobs, many of them in manufacturing. My tax reform plan to lower rates for the middle class and for small business creates 7 million more. And expanding trade, cracking down on China and improving job training takes us to over 12 million new jobs.”
That’s 12 million new jobs in his first term in office. As Romney says, more than half of those jobs, 7 million, would be generated by his tax plan. One of the people behind that tax proposal is Kevin Hassett, a Romney economic adviser and senior fellow at the American Enterprise Institute.
Romney’s tax plan would cut tax rates by 20 percent for all taxpayers. That would cost the Treasury almost $5 trillion in lost tax revenue over 10 years. But Romney says it won’t cost $5 trillion, because he will offset the losses from lower rates by ending deductions and closing loopholes; he has not said which ones.
Joel Prakken, chairman of the firm Macroeconomic Advisers, says it would be very difficult for Romney’s plan to work without ending some very popular deductions — “mortgage interest, health care benefits and the like.”