Obama: End Tax Breaks To Stop Overseas Hiring

WASHINGTON — End tax breaks that reward some U.S. companies with overseas subsidiaries and encourage those businesses to create jobs in other countries, President Barack Obama is telling Congress.

Yet it's an idea that has raised concerns even among some lawmakers in the president's own party.

At issue is a bill, now stalled in the Senate, that would do away with some tax credits and deferrals for U.S. companies for operations abroad.

"There is no reason why our tax code should actively reward them for creating jobs overseas," Obama said in his weekly radio and Internet address Saturday. "Instead, we should be using our tax dollars to reward companies that create jobs and businesses within our borders."

Though Obama singled out Republican opposition, the bill also failed to get support from some Democrats, including the chairman of the Senate Finance Committee, Sen. Max Baucus, D-Mont. He has expressed concern that the change would put the U.S. at a competitive disadvantage.

The ending of the tax provisions has run into opposition from business groups, including the National Association of Manufacturers.

Obama said that while companies that conduct business internationally do make an important contribution to the U.S. economy, it doesn't make sense to grant them tax breaks when companies at home are struggling to rebound from the economic crisis.

Obama has said he wants revenue collected from ending the tax provisions to go to other business tax breaks, by making permanent research and development tax credits and allowing businesses next year to write off all new equipment costs.

In the GOP address, Rep. Mike Pence, R-Ind., urged House Speaker Nancy Pelosi, D-Calif., to call Congress back into session to take an immediate vote on whether to extend Bush-era tax cuts.

"The prosperity of the American people is more important than the political fortunes of any politician or any political party," Pence said.

Pelosi and Senate Majority Leader Harry Reid, D-Nev., have said the tax issue will be taken up after the Nov. 2 election.

The tax cuts have been a point of contention between the president and Republicans in the lead-up to the midterm elections. The GOP wants to extend the tax cuts for all Americans, including the top income earners, while Obama wants to extend the tax cuts only for the middle class – those families earning less than $250,000 a year.

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Online:

GOP radio address: http://tiny.cc/3vyo2

Obama radio address: http://www.whitehouse.gov

Comments

[BocaMom]

10:55 PM on 10/19/2010

It's about time! I don't know why he had to wait until election time to do it! Now how about fixing the economy and getting 25 million Americans back to work!

[barrada nicto]

05:23 AM on 10/20/2010

There was a ton of stuff to do after the Bush/Cheney crooks left office.

[f8doggie]

07:46 PM on 10/19/2010

Yes. Outsourcing is part of the whole equation that has left the American worker in the dust. This was an Obama campaign promise, and I hope that he keeps his word (in as much as the Grand Obstructionist Party lets him) . Another fix he can make are the offshore "headquarters" and bank accounts of companies and the wealthy who avoid paying US Taxes (all the while whining that they deserve tax cuts).

[moose and squirrel]

06:43 PM on 10/19/2010

shoulda done this the first week he was in office.

[JJJJJJJJJJJJJJJJJ]

05:57 PM on 10/19/2010

YES YES, push this issue!!!!! this is the single most important piece of legislation for ending the recession!!!!!!!

[grf67]

02:11 PM on 10/19/2010

The orginal bush tax cut legislation which was led by the repubs provided for the upcoming tax increases so this should not come as a surprise. The tax cuts were unaffordable when they were passed and are still ubaffordable now. The republican legislation, along with two unpaid wars and an unpaid drug program, is the major reason for our debt problem. Let the legislation expire.

[Marcus1]

05:27 PM on 10/19/2010

F&F something even a supposed common sense conservative might understand. Not.

[loki]

12:48 PM on 10/19/2010

come on and grow a pair President Obama. Just make it happen. Sign an executive order and do it. Bush did it, Clinton did it, Bush 1 did it, Reagan did it. Just make it happen and stop talking. You lay everything on the congress knowing full well in this environment in congress that nothing will ever happen that you promise. In fact, we always end up getting the short end of the stick, and the rich get more and more. Unless that is the whole plan. Playing good cop bad cop to make things go in favor of the ivy greed elitist.

[moose and squirrel]

06:38 PM on 10/19/2010

how about you grow a brain. not everything can be done with executive orders. certainly canceling a law passed by congress is outside the jurisdiction of the president.

[swisskabab]

10:33 AM on 10/19/2010

Obama is lying and I have never supported the Repubs. Obama put up the same charade before he got elected ... he did nothing then and he will do nothing now. He is lying. The Dems had a clear majority yet, they did nothing (see story below). Of course, the Repubs would have done the same thing. They are all serving their own interests and the interests of their corporate masters including Indian and Chinese companies.

http://www.deccanchronicle.com/business/anti-outsourcing-bill-blocked-us-senate-367

[Virgil Kane]

06:52 AM on 10/19/2010

When will Obama raise taxes on the ultra rich?

[graffitijoe]

07:37 AM on 10/19/2010

After the mid-terms he will have the lame ducks who just got booted out of office do it for him.

[vippy]

05:24 AM on 10/19/2010

Too bad Obama always says the right thing and then rolls over. 2 years of this enough for me.
I realize the president is just a puppet. But all the ones in congress need to go, all of them.
Both parties got us into this mess.

[loki]

12:51 PM on 10/19/2010

if only people like us with our eyes open, were not such a minority there might be a chance of real change happening. But most just believe the political ads and the BS from politicians and talking heads on tv, and ignore the facts that are right out there in plain view.

You are fanned for being cognitive thinking person. Apparently a rare breed these days.

[GoodRead]

07:39 PM on 10/18/2010

While it’s generally true corporate tax rates are higher than individual tax rates, it’s fiction that corporations pay more income tax than individuals. In fact, corporations pay less than 14% of all government income tax receipts *

2009 Income Taxes Receipts (in billions)

Fed / State & Local / Total
Individuals / $953.0 / $266.9 / $1,416.4 ($1.4 trillion)
Corporate / $146.8 / $49.8 / $196.6

* source: http://www­.usgovernm­entrevenue­.com/yearr­ev2009_0.h­tml#usgs30­2



Every deduction a corporation takes, like bonuses or bad debts, is a tax on working people. When a bank forecloses on your home and takes a loss, that loss is deductible meaning, the homeowner is helping kick himself out of his own home.

Now that corporations have been given free speech rights (or did they buy it?), and are pursuing other human Bill of Rights rights in the courts, the playing field should be leveled.

Taxpayers should get to deduct the cost of commuting back and forth to work and take depreciation deduction if they travel in a vehicle. Need day care, a nanny, or a sitter so you can leave the kids to generate an income - tax deductible.

Need to eat while earning a buck? … tax deductible. Want to stay dry while walking from the train station to the office, your umbrella and your London Fog would be deductible.

And what about the vending machine that took your dollar and didn't pony-up your 3 o'clock Snickers? No worries, bad debts are tax deductible too.

[vippy]

05:31 AM on 10/19/2010

I remember in Germany the way to work, your lunch cost, etc. was all deductible, necessary for you to go to work. I always thought someone paying child support should be able to deduct it since they are not getting to spend that amount, that would be fair. But look at all the socialism the rich are enjoying, one subsidy after another and they cry and moan when the government wants another dollar. Make more money, pay more taxes should be a go! But the little man does not have lobbyists. And the people for the last 50 years were more concerned
about religion, abortion and gay issues as we are today, and neglect to ask pertinent questions that would improve our lifestyle, ergo we have the government we deserve. I wished I could move to Canada or back home.

[GoodRead]

07:39 PM on 10/18/2010

While it’s generally true corporate tax rates are higher than individual tax rates, it’s fiction that corporations pay more income tax than individuals. In fact, corporations pay less than 14% of all government income tax receipts *

2009 Income Taxes Receipts (in billions)

Fed / State & Local / Total
Individuals / $953.0 / $266.9 / $1,416.4

[sylas petcat]

04:17 PM on 10/18/2010

The tax code does need to be changed and of course business will fight it tooth and nail. some of these companies do so much more of thier business outside the US that it is laughable to call them American.
Of course the Chamber of Commerce is against it. They take in millions from foriegn countries and corporations who want a hand in our politics and have found a neat way to buy it.
Republicans have tried for years to literally sell us out to foriegn interests.
Democrats try not to think about it as they do it and take the money.
They've almost succeeded.
It would be nice if Obama could put a stop to it. But if he is still determined to sing "Kumbiya" with the Republicans it's nothing but a pipe dream. Even the Dems have been bought off for this one.

[AravindM]

05:16 PM on 10/18/2010

It is America which has perpetuated global hegemony by using military-industrial complex, using arms, businesses and financial power to intervene and destroy local markets in India, China, Brazil and several third world countries. It is USA GOVT, elected by Americans, that is selling weapons to other countries, under the guise of threat from other countries. We have the right to intervene, just like you did with impunity. Your protectionism and xenophobia will push more jobs out of USA as no company wants to operate in high tax, high regulation environment. Look at USSR, Cuba and other countries where people depended on govt to create jobs, punish profit-making companies.

Moderator: Encourage debate NOT suppress the opposition.

[vippy]

05:34 AM on 10/19/2010

That bill died in congress here 2 weeks ago and who even noticed? Was not even a column here in Huffpo amazingly. Then Obama said the very next day it collapsed that he wants products made here in America LOL.

[swisskabab]

10:39 AM on 10/19/2010

Oooh look who's talking ... India and China have been the biggest socialist economies with massive public sector undertakings for the last 50 years. So can the preaching. And guess what, the tide is turning with these govt going back to their old ways to "cool off" their economies.

[vippy]

05:33 AM on 10/19/2010

What did congress do with the UBS Scandal - nothing! They all are guilty and hide their money overseas and congress won't shoot themselves in the foot. Germany on the other hand bought the CD for cash and got the names of the culprits. Says a lot for our crooks in Washington and yes,
both parties if you have not noticed.

[Reno Fickler]

02:14 PM on 10/18/2010

Do you think Obama knows who made those laws???? That would be a Congress he has no say about. It is just more tele-prompter BS to make you think he cares. Money rules, not humanity.

[GJMandinka]

01:54 PM on 10/18/2010

Yeah, kind of a no-brainer here. Does anybody still think that unregulated trade was a good idea? The only folks who think it makes sense are some short-sighted business people who think that cheap labor is worth destroying an entire market for. Of course you should provide incentives (and disincentives) to encourage companies to use more expensive U.S. labor. Making U.S. labor compete with labor from China or the third world is moronic. All it will do is lower our standard of living to theirs. Yeah, all that infrastructure, good schools, clean air and water, all made possible by the higher tax-base of a middle-class U.S. economy.
For those who think regulation is somehow against the laws of nature and economics; I recommend that they block their carburetors wide-open and go for a drive. Keep your foot off that brake! Experience a little Boom and Bust first-hand.

[golgi1]

12:52 PM on 10/18/2010

This is the smartest thing Obama has done since winning the election, as well as the #1 thing that has a chance at turning this economy around.