Here’s Barack Obama, claiming that the tax code offers incentives to move jobs overseas:
I want to do the same thing, but I’ve actually identified how we can do that. And part of the way to do it is to not give tax breaks to companies that are shipping jobs overseas.
Right now, you can actually take a deduction for moving a plant overseas.
Romney’s retort (“the idea that you get a break for shipping jobs overseas is simply not the case”) was fine, but here’s the full explanation:
It’s a lie. There is no “tax break” for shipping jobs overseas. The tax code treats companies that move jobs overseas the same as anyone else. Companies pay taxes on profits, not revenues. So any business expense is subtracted from revenue before paying taxes.
The “deduction for moving a plant overseas” is exactly the same “deduction” as the one for moving a plant to America, or for buying inventory, equipment, or office supplies. You could just as well talk about “tax breaks” for abortion equipment.
The subtext for this is Democrats have proposed to alter the tax code to create tax penalties for companies that do things Democrats don’t like. (Or claim not to like, anyway.) That strikes me as very bad policy.
Moreover, it’s pretty clear that the Democrats view their proposal as politically unpopular. If they thought it would be popular, they would be forthright about it. But they’re not: rather than talking about creating tax penalties, they’re lying about closing nonexistent tax breaks.