PrintMay 12, 2009
The Outsource Corporate Headquarters Act of 2009
A staple of President Obama's stump speech during the 2008 Presidential campaign was a promise to end tax breaks for corporations that ship jobs overseas. On May 4, the Obama administration rolled out its proposal to do just that. While Obama is correct that US tax policy discriminates against corporations that produce in the United States, his proposed solution should be called "The Outsource Corporate Headquarters Act of 2009." On the surface, Obama's plan sounds like a good idea. Currently, US corporations can defer, indefinitely, paying US taxes on profits produced abroad while deducting foreign investment expenses from their US income taxes. As a result, they pay lower tax rates if they produce abroad than if they produce in the United States. America's 35% corporate tax rate is the second highest in the world. Emerging markets have much lower rates. Ireland's corporate tax rate, for example, is only 12.5%. If an American corporation produces in Ireland, it only...(Read Full Article)
