Ed Morrissey
HotAir.com
9/2/2010
During the presidential campaign, Barack Obama repeatedly vowed to force American companies to pay taxes on overseas earnings, rather than take a tax credit for taxes paid by its international operations. Eventually the White House backed down from that plan after heavy criticism from business leaders made it clear that multinationals would simply move their headquarters elsewhere, and smaller firms would simply be left uncompetitive in the global market. A similar plan has returned, the National Taxpayers Union warns, only this time it’s just targeted at the oil and energy industries — along with another tax change that would strip American companies of a manufacturing credit that keeps jobs in the US:
Congress is considering an extremely destructive “double tax,” through repealing a widely available credit that offsets taxes paid to other countries. However, this new “double tax” would apply only to energy providers here in the U.S. – meaning state-owned companies in countries like Venezuela and China will effectively receive a competitive edge over American firms. Ironically, even BP – the target of Congress’s ire over the Gulf spill – will gain a tax advantage. Also under consideration in the U.S. Senate is a repeal of Section 199 of the U.S. tax code, a manufacturers’ deduction, for only the oil and gas industry. The deduction allows companies to reinvest revenue into creating jobs and domestic economic growth…
…As the NTU points out, eliminating the Section 199 tax credits removes incentives for American companies to keep jobs at home. That’s the exact opposite direction of Democratic rhetoric, which usually refers heavily to “outsourcing” jobs on the global market. They will keep Section 199 in place, but exempt oil and energy companies from applying it to their own tax returns…
The article continues, with more video, at HotAir.com
