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- Accomplishment: Unveiled plan to remove tax incentives that were encouraging U.S. companies to base jobs overseas(ref).
- What does it mean?
Loopholes allowed companies to avoid billions of dollars in taxes through overseas tax shelters. This new plan would remove the loopholes as well as create incentives for companies to create jobs at home, which would return over one hundred billion dollars to the United States (ref).
Read the press release for full text.
- Why does it matter?
One of the reasons that jobs crises have a tendency of deteriorating is large companies start to see fewer profits when the economy worsens, and seek to save money and maximize profits any way they can. With tax loopholes, some companies will fire their employees and move overseas. The increase in unemployment causes the economy to dip again, reduces consumer spending, and triggers more companies to mirror the action of the former.
To encourage our companies to stay in or return to the United States, the tax haven changes would, in addition to closing loopholes, add a Research and Experimentation Tax Credit, which would provide tax benefits to businesses choosing to invest in long-term research and innovation in the United States (ref). This change will benefit Americans not only because it will encourage businesses to return jobs to the United States, but also because they will be quality, long-term jobs: encouraging Wal-Mart to build another location so we can add 20 more below-subsistence, interchangeable jobs is far less useful than encouraging businesses working to develop new medicines, or energy efficient electronics, or other projects that will need employees to stay with their project for at least several years.
