Our guest blogger is James Kvaal, Domestic Policy Advisor at the Center for American Progress Action Fund.
In Milwaukee yesterday morning, McCain campaign advisor Carly Fiorina described how –- as the former CEO of Hewlett Packard –- she parked profits overseas even though it negatively impacted the U.S. economy. Watch it:
American corporations can postpone U.S. taxes on foreign profits indefinitely by keeping profits overseas. Since U.S. taxes are effectively voluntary, it’s not surprising that few corporations choose to pay them.
While Fiorina was leading HP, the company aggressively exploited offshore tax planning. The company held more than $14 billion overseas in 2004, according to the Washington Post, reducing its tax rate from 35 percent to 12 percent. At the time, Fiorina was a prominent defender of the offshoring of American jobs –- or, as she called it, “right-shoring.”
Now she is advising Sen. John McCain, who has refused to support the elimination of incentives to invest overseas. He even voted against an amendment to require companies to pay taxes on money they earn from foreign-made products sold in the U.S.
The bottom line: While proposing $175 billion in corporate tax cuts, McCain would continue to allow CEOs focused on the bottom line to invest overseas, rather than at home. The result is lower wages and a higher share of the tax burden for American workers.