Mitt Romney’s tax plan would reward companies for exporting 800,000 U.S. jobs on top of the six million manufacturing jobs they have already exported over the last 10 years, according to a new report released yesterday.
The report by the Center for American Progress finds that the Romney proposals would encourage firms to both ship jobs overseas and to duck taxes.
The Romney plan provides multinational corporations with a $130 billion tax cut over 10 years that, when combined with his plan to cut the corporate tax rate to 25 percent from 35 percent, would cost nearly $1 trillion the report finds.
After the findings were announced Richard Trumka, president of the AFL-CIO had some unkind words for Mitt Romney but high praise for President Obama.
“This is the first president to talk about reviving manufacturing and bringing back jobs from overseas,” said Trumka. “The outsourcing of jobs is a major issue in this election and there will be more of the same from Romney, who wants to send jobs overseas, or a president who wants to fight for the middle class and keep jobs here at home.”
The report shows that Romney’s plan would permanently exempt corporate profits made overseas from U.S. taxes and encourage businesses to keep their money in offshore tax havens, leading to a loss of 800,000 U.S.-based jobs. In contrast, the report notes, President Obama has proposed a global minimum tax to make sure corporations are paying their fair share and not gaming the system.
The report comes at a time that the issues of fair taxes and keeping jobs in America have become front and center in the presidential election campaign. CAP President Tom Perriello said, “The acceleration in this debate over sending jobs overseas has come from voters more than from lawmakers in Washington.”
He called the outsourcing of jobs “a dangerous practice” and one of the most important issues for working people to consider in this election.
Trumka said that President Obama “has separated himself from Romney by showing his commitment to investing in America, while Romney continues on his path to shift jobs overseas.
Calling Romney the “happy outsourcer,” Trumka noted the Republican presidential candidate’s tenure with Bain Capital, where he shuttered factories, laid off workers and hid money offshore. He said unions would fight to elect candidates committed to keeping jobs in America and fight to “defeat every last politician who backs outsourcing.”
Romney claims that U.S. firms would use his $1 trillion tax cut to create jobs in the United States.
Seth Hanlon, CAP’s director of fiscal reform, said the Romney theory is “based on the flawed belief that some of the world’s largest corporations would invest more in the United States if only they had more cash at their disposal. Yet large corporations are already holding onto near-record levels of cash – $1.7 trillion at the end of 2011 – and are also able to borrow money at historically low rates. Given a windfall tax cut on their foreign earnings, they are likely simply to buy back shares or pay dividends to investors.”
Hanlon said there is precedent for his prediction. “That’s exactly what happened,” he said, when Congress enacted a one-time “tax holiday” for foreign profits in 2004.
“Corporations used the tax-amnestied profits for share buybacks and dividend payouts rather than investment or job creation in the United States. Many corporations that took the tax breaks actually shed jobs.”
Photo: Occupy Wall Street activists in Mitt Romney masks and grim reaper costumes at a demonstration outside a luxury midtown hotel, March 14, in New York City, while a fundraiser for Romney took place in the hotel. Several hundred protesters marched behind a black urn representing “job cremation.” (AP Photo/Mary Altaffer)