Large Corporations Are Getting Tax Cuts to Send Jobs Overseas and Pocket Bigger Profits: It's That Simple
BuzzFlash at Truthout proposed the other day that corporations should have their taxes increased to the highest possible level. But they could reduce those taxes dramatically: by proving that they have created jobs in any tax year and getting a tax credit for each new position.
There's only one very significant catch: the jobs must be created in the US, not overseas. If employers maintain their current workforce in America, they would also receive a tax credit. If businesses move jobs overseas, their taxes get raised higher depending upon the percentage of their workforce that is offshored.
Sounds like a sensible proposal. Create jobs in America and pay fewer taxes; move jobs overseas and pay higher taxes. Now this is where the rubber meets the road in determining who is really a domestic "job creator."
There is ample evidence that increased tax breaks for large corporations lead to two primary things: 1) expanding their workforce overseas, and 2) reducing their employees in the US and sitting on the profits. The stagnating unemployment crisis in the US is a testament to that.
An article in the Atlantic magazine from earlier this year provided ample evidence of this. Entitled "The Rise of the New Global Elite," it included the real "job creator" outlooks of the American global corporations. It noted the perspective of a US-based CEO:
The U.S.-based CEO of one of the world's largest hedge funds told me that his firm's investment committee often discusses the question of who wins and who loses in today's economy. In a recent internal debate, he said, one of his senior colleagues had argued that the hollowing-out of the American middle class didn't really matter. "His point was that if the transformation of the world economy lifts four people in China and India out of poverty and into the middle class, and meanwhile means one American drops out of the middle class, that's not such a bad trade," the CEO recalled.
Similar sentiments abound in the article. Thomas Wilson, the CEO of Allstate put it bluntly: "I can get [workers] anywhere in the world. It is a problem for America, but it is not necessarily a problem for American business ... American businesses will adapt."
No, large American corporations are not creating jobs in the United States to any great extent, nor will they in the future.
They should be taxed to the fullest extent possible until they start producing employment here in the USA.