This is meant to be a bullet hole in President Obama’s rhetoric as he prepares to visit Master Lock in Milwaukee.
When last campaigning four years ago, candidate Obama said he was going to eliminate tax breaks for companies that move jobs other countries. He’s saying it again as he moves back to the campaign trail at places like Master Lock.
He didn’t get that done in his first three years as president, because, essentially, there are no such tax breaks.
Ask any accounting firm, like I did. My company has operations in Mexico, China and India, and we get no breaks. I’ve triple-checked with our accounting and tax experts. We are there because our customers are there, not for tax breaks.
What the president could promise is that his administration will get serious about bilateral trade negotiations with China over the growing trade deficit, over China’s theft of intellectual property, over reforming the U.S. patent office where patents lie unprocessed and therefore vulnerable, over China’s soaring carbon emissions and over the under-valuation of the Yuan.
Not much progress has been made on those issues in his three years, with the exception of some hardening of the Yuan, the result of a continuation of jaw-boning from the previous administration.
And, if he is really serious about moving jobs back home from abroad, he could join a bipartisan effort to lower the high U.S. corporate income tax. That would have to be phased in as the U.S. budget deficit is brought under control.
If the U.S. corporate rate were at a par with other countries, there would be no issue about bringing home profits earned overseas. It’s the negative differential that keeps U.S. corporate funds under padlock in other countries.
It will be most interesting to see if there is any reality in the president’s rhetoric Wednesday in Milwaukee. He needs to make his statements about the global economy bullet proof.
