Archives for May 4, 2009

In a move that already has multinationals mobilizing their lobbyists, Obama announced his intention to close tax loopholes  and tax havens for American based multinational corporations. In support of his proposal, Obama claims that his plan would generate $210 billion in revenue and also create American jobs. Those who oppose the plan claim that it will hurt American companies and will reduce employment.

On one hand, the proposal would seem to be able to achieve its goals. After all, if companies can no longer get out of paying taxes, then tax revenue would increase. Also, if corporations did not gain an advantage from moving jobs overseas, then they would be less inclined to do so.

On the other hand, there are reasons to think the plan might have the opposite result. In general, corporate folks seem to be more concerned with profit than with contributing their fair share to the general good. As such, some of them might decide to move their operations completely overseas in order to take advantage of the tax breaks and low wages available outside the United States. This would, of course, result in a loss of tax revenue and jobs.

Of course, a citizen who insisted on special tax breaks and threatened to leave America for another country if he did not get them would be regarded as being rather unpatriotic and trying to threaten or blackmail the government. Naturally, such a person would not be well regarded.

Another reason that the proposal might have an impact the opposite of what Obama intends is that the companies affected by it might lose ground relative to foreign competitors and this would impact their revenue and the jobs they have available.

Of course, this does raise the question of whether this loss would be greater than the loss in revenue and jobs of the current situation.

While the Republicans will no doubt be very much against this plan, their professed views should drive them to embrace it.

First, Republicans  have often made a big deal about how illegal immigrants are stealing American jobs. If they are concerned that foreign nationals are taking American jobs, then they have a chance to do something to prevent it by supporting this plan. After all, if it is bad for a Mexican to sneak across the border and grab a job in the US, then it should be equally bad for a corporation to sneak a job across the border for a non-American to fill.

Second, Republicans have often railed against government involvement in business and cry out for the free market. The loopholes and such provided by the government are clear cases of government involvement and they also go against the free market. As such, the Republicans should insist that the state not meddle in the free market by giving such benefits to the corporations.

Third, the Republicans are often big on talking about patriotism, loyalty to America and serving the country. By supporting this plan they can show that they love America by helping to ensure that the American corporations show their patriotism and loyalty by paying their taxes and serving the country. Anything less would be unAmerican and would probably be soft on terror. Well, not really-but the Republicans still love to talk about terrorism.

Fourth, since the time of Reagan Republicans have expressed their loathing of those who sponge off the government. This proposal gives them a chance to act on that principle and get those corporate welfare queens off the dole.

So, this proposal perfectly matches many of the principles professed by Republicans. As such, they should support it.