Obama’s plan to raise taxes on the foreign operations of U.S. businesses may destroy management and professional jobs in the U.S., will put American business at a competitive disadvantage versus its foreign competitors, and may result in profitable overseas operations of U.S. companies being sold to their foreign competitors. So concludes the Washington Post‘s Robert Samuelson in his column today. It’s yet another example of Obama sacrificing substance for grandstanding. As Samuelson notes, U.S. corporate taxes are already among the highest in the world.
It’s doubtful that this tax increase will raise $21 billion a year, as Obama claims. By killing jobs, it may actually cut tax revenue. But even if it did, it wouldn’t make a dent in the sea of red ink created by Obama. “The estimated $210 billion revenue gain over 10 years — money already included in Obama’s budget — represents only six-tenths of 1 percent of the decade’s tax revenue of $32 trillion, as projected by the Congressional Budget Office. Worse, the CBO reckons that Obama’s endless deficits over the decade will total a gut-wrenching $9.3 trillion.”
The White House predicts the budget deficit will top $1.8 trillion, four times 2008’s record. That deficit is the product of a 2009 budget that Obama voted for as a Senator, plus an $800 billion stimulus package that the Congressional Budget Office says will actually shrink the economy “in the long run,” contrary to Obama’s claims that it was needed to prevent “irreversible decline.” (Even in the short run, the stimulus will create few jobs. The White House now admits that there will be no job growth until 2010. It’s not surprising, since the stimulus package funds mostly sectors where unemployment is low — like education, health care, and state government — and not sectors where it is high — like construction, transportation, and production jobs).