"GOP Rep. Price Calls Corporate Tax Break That Would Send Jobs Overseas A ‘Jobs Magnet’"
In the midst of debt negotiations, Republicans have gone to bat for their biggest fans: multinational corporations. Flatly refusing to eliminate wasteful tax breaks for inordinately profitable companies, Republicans are adamant on protecting the privilege of the wealthy few. In defending this unpopular position, House Republicans paint corporations as beleaguered job creators who are suffering under prohibitive tax rates.
In an interview with Newsmax on Saturday, House Republican Policy Committee Chairman Tom Price (R-GA) declared that the U.S. corporate tax rate is so draconian that businesses prefer to “go almost anywhere else.” He then proceeded to advocate for a territorial tax system, under which offshore profits of a U.S. corporation would be exempt from U.S. taxes. Price argued that exempting offshore profits would create a “huge jobs magnet” here:
PRICE: We have the highest corporate tax rate in the industrialized world which makes it so that, if you’re a job creator out there, there’s no incentive from a tax standpoint to put your business here in America. It’s better from a tax standpoint to go almost anywhere else…There’s something called repatriation or territorial tax which means that businesses that make a profit outside the united states but they’re domiciled here, they have a huge incentive not to bring that money back — repatriate that money — because of the tax rate here. And if we were to allow those taxes to come back at the rate at which they’re taxed in those other countries, then we would have a huge jobs magnet to this country.
However, according to a Citizens for Tax Justice report, not only would such a territorial tax system give companies greater incentive to profit-shift (disguise U.S. profits as foreign profits), but it would give corporations “a greater incentive to shift actual operations — and jobs — to other countries.” The function of a “job magnet,” presumably, is not to send jobs overseas.
Of course, the entire premise of this argument isn’t entirely factual in the first place. Unless, by “highest corporate tax rate in the industrialized world,” Price means the U.S. has “the second lowest corporate taxes in the developed world.” While the U.S tax rate is high on paper, the ever-expanding number of corporate tax loopholes makes for a very low corporate tax rate across the board in the U.S. Thus, as a share of GDP, only Iceland’s corporate taxes rate lower.