October 10, 2008
Posted: 06:50 PM ET
Is McCain really in favor of tax breaks for outsourcing companies?
Is McCain really in favor of tax breaks for outsourcing companies?

The Statement

At a campaign event Thursday, October 9, in Cincinnati, Ohio, Democratic presidential nominee Barack Obama repeated a long-time charge: "John McCain says he wants to keep giving tax breaks to companies that ship jobs overseas."

Get the facts!

The Facts

All U.S. corporations are required to pay a 35 percent tax on income, including that earned outside the United States, but numerous loopholes complicate corporate tax laws. U.S. companies are allowed to defer paying taxes on income as long as that money is being used by the company overseas and remains "unrepatriated income." Tax experts say that can amount to a lengthy or even indefinite deferral, as long as the corporation continues its overseas operations. Deferring tax payment on income earned with non-U.S. operations does offer an incentive for U.S. companies to do business abroad.

The Obama campaign cites as the basis for its claim three Senate votes by Republican nominee Sen. John McCain going back to 1995, with the most recent one being in 2005, against repealing tax subsidies or tax deferrals for U.S. companies with overseas operations.

The Obama campaign also says McCain's economic proposals don't include proposals for changes to current law that allow U.S. companies to defer paying taxes on off-shore income.

The McCain campaign says that McCain has not made statements advocating tax breaks for overseas companies, and the campaign points to McCain's proposed reduction in the tax rate for all U.S. corporations from 35 percent to 25 percent as an incentive that would encourage multinational companies to invest more in U.S. operations and jobs. A CNN search of McCain campaign statements also found nothing advocating tax breaks for corporations operating overseas.

CNN asked a McCain campaign spokesman to explain McCain's position on tax deferred corporate income. The spokesman said the issue was being researched, but by deadline on Friday, October 10, there was no response. The campaign did supply CNN with material arguing that the loss of U.S. jobs to overseas operations cannot be linked directly to the tax rules for U.S. companies operating abroad.

Robertson Williams, principal research associate for the Washington, D.C.-based non-partisan Tax Policy Center, said the issue of taxes and domestic companies moving operations and jobs overseas is complex.

"There is the real movement of production units — you close a factory in North Carolina and start producing textiles in China with Chinese workers, and the people in North Carolina lose their jobs. Then there is the strictly financial one — a company moves its headquarters to the Cayman Islands but leaves its jobs here. Either way, there are tax implications for any company (with operations abroad) but they're not necessarily related to sending jobs overseas," Williams said.

"The point is that McCain has not come out in favor of cracking down on companies doing business overseas," Williams said. "It's one of those amorphous things — if you don't favor undoing something, does that mean you're in favor of doing it?"

The Verdict

Misleading. While McCain is on record voting as recently as three years ago
against eliminating or changing tax deferrals for U.S. companies with overseas

operations, he has not said he "wants to keep giving tax breaks" to companies
sending jobs overseas, as Obama stated. Obama's statement also oversimplifies
the complexities of taxes for U.S. companies operating abroad, and U.S. jobs
moving overseas.

Filed under: Barack Obama • Fact Check • John McCain


James   October 10th, 2008 9:54 pm ET

Mccains Ideas on the economy seem to be whats good for corporate america is good for all of america.

While this would seem like a good idea. Like business receiving tax breaks so they have more money to give to their employees. It does not work in practice. While some small business might be able to give that long needed raise most jobs in america would see no difference and the blue collar workers will just get screwed.

What I would like to see is a raise of the minumum wage coupled with tax breaks to companies this ensures that your joe six pack worker gets the benifits of tax breaks to a company.

also if it were raised from say 6 to 11 dollars an hour competive jobs that require special training would also be forced to increase pay as well but since everyone is receiving tax breaks it would be possible.

This would be a transference of wealth to the people in a way that benifits everyone but government.

LJinLACA   October 10th, 2008 9:54 pm ET

There can be no economic recovery without American jobs and growth in the tax revenue.
We couldn't afford this trend when it started and surely everyone knows at this point it cannot continue.
Obama gets it, Biden gets it, and hopefully the voting majority puts it to bed.

Bill   October 10th, 2008 9:51 pm ET

Simple explanantions by simple minds; no wonder this comes from Obama commercials sponsored by CNN

evans   October 10th, 2008 9:50 pm ET

California Gold, I would suggest you remove the koolaid from your ears and might be able to hear

Hal, Redondo Beach, CA   October 10th, 2008 9:49 pm ET

Well who can tell where McCain stands on any issue??

He wants to nationalize mortgages, which is PURE socialism and then he wants to regulate and deregulate.

He hates war but he loves to joke about it and thinks we need to have more of 'em.

He thinks getting Al Queda in Afgahnistan is not important to the war on terror the next day it's central.

He doesn't understand the economy then he's an expert.

He says he wants a clean campaign then he starts the biggest sleazeball campaign.

jm from sc   October 10th, 2008 9:43 pm ET

The best way to figure out what a person will vote in the future is look at the past. If he voted against eliminating the tax cuts three years ago, he will continue to support that position in the future. McCain will say, do or allow just about anything to get elected.

Terri   October 10th, 2008 9:43 pm ET

McCain didn't expect to be facing a qualified, well educated black man for the highest position in the land. So now he has to try low down tactics to discredit Obama. I use to think he was an honorable man in a dishonest party, but now I know he is and what's really sad is he doesn't see himself drowning in a pool of desparation. Sarah Palin is an ignorant, uneducated, bullying woman, who acts like trailer park trash that's waiting to be taken out. Just give her a Bud Light and a rifle and she'll be fine. ERACISM

MICHAEL WERNER   October 10th, 2008 9:42 pm ET

I AM CONCERN WITH PRESIDENTIAL NOMINEE JOHN MCCAIN'S CHANGE TO HIS WEB SITE. HE ORIGINALLY SAID THE BAIL OUT OF HOME OWNERS SHOULD BE BASED ON CURRENT ESTIMATES OF SAID PROPERTY.

HIS WEB SITE NOW SAYS THESE BAD MORTGAGES SHOULD BE BAILED OUT BASED ON AMOUNT OF LOAN AT THE TIME LOAN WAS AUTHORIZED WHICH IS A LOT HIGHER APPRAISAL VALUE THEN PRESENT APPRAISAL VALUE IS TODAY.

THIS CHANGE WOULD MEAN THAT AMERICAN TAX PAYERS WOULD BE BUYING PROPERTIES ABOVE THEIR CURRENT APPRAISAL VALUE, AND OUR U.S. CITIZENS WOULD BE ON THE HOOK FOR THESE HIGHER COST. THIS MEANS THE TAXPAYERS WOULD BE PAYING FOR LOSSES OF THESE PROPERTIES IN DEFAULT BASED ON OLDER HIGHER APPRAISALS WHICH IS NOT FAIR TO AMERICAS.

IF WE CAN BUY DEFAULTED PROPERTIES AT THEIR CURRENT ESTIMATES, WE THEN MAYBE ABLE TO ACTUALLY MAKE A PROFIT ON THESE HOMES AS PRICES GO BACK UP WHICH MAY BE YEARS, BUT ITS BETTER THEN BEING DEEPER IN DEBT FROM THE DAY PROPERTIES WERE PURCHASE. NO HOME BUYER WOULD WANT TO PAY FOR A HOME AT OLDER HIGHER PRICES, SO WHY WOULD THE U.S. GOVERNMENT NOT BE ALLOWED THE SAME SENSIBLE PURCHASES.

MCCAIN CAMPAIGN MANAGER WAS BEING PAID BY FANNIE AND FREDDIE UP TO A MONTH AGO!

SC   October 10th, 2008 9:41 pm ET

Bush/Cheney- McCain/Palin, WOW is see no difference.

Texas Trail Dog!   October 10th, 2008 9:41 pm ET

OF COURSE NOT, DUMB REARS!!!

Matt   October 10th, 2008 9:40 pm ET

This article just proved that Obama is lying when he talks about John McCain and you people can't see that? Your so much on the Obama bandwagon you don't see when good, unbiased journalism shows the facts

Tired of McCain   October 10th, 2008 9:37 pm ET

McCain probably owns a business that takes jobs away from hardworking Americans and sends the same jobs to uneducated, America hating people who are willing to work for .25 cents a day. While Americans struggle. Huh! And you want this man to be your president. Have Fun!

dmcrt4lf   October 10th, 2008 9:36 pm ET

I would like to know if trickle down economics has kept jobs in the U.S. or has chased them out of the country. If not why are so many people out of work?

That might be why the housing market bottomed out and so many loans that were sold a hundred times over would have gotten paid.

Go figure !

S. Boatman   October 10th, 2008 9:35 pm ET

In Other News. . . Sarah Palin Has Been Found Guilty Of Abuse Of Her Power!

Vicki   October 10th, 2008 9:33 pm ET

I trust Senator Obama to do a lot to improve the lives of all of us. Having McCain would just be continuing the horrible nightmare of Bush and Cheney. We can't afford any more neocon war mongering leadership with a disregard for lives or our economy.

Tony   October 10th, 2008 9:32 pm ET

THE ONLY THING MCCAIN AND PALIN HAVE ACCOMPLISHED IS INSIGHTING FEAR, RACISM, AND ANGER TO A WHOLE NWE LEVEL.

TO HELL WITH THEM BOTH.

White-African(born there) American Military BRAT   October 10th, 2008 9:29 pm ET

Dito on Niki's comment!!

Ons   October 10th, 2008 9:28 pm ET

McCain does not understand how the economy works so he does not even know if there is anything like companies shipping jobs that is Greek to McCain. So while I have to make better decision that affects my 16 months son and me I’ll rather go to someone who understands the economy and restoring American image abroad. We need a leader who can bring us together for common goal verses someone who is dividing us.
And Obama and Joe will lead us better

Tony   October 10th, 2008 9:26 pm ET

MCCAIN = BUSH

PALIN = CHENEY

NO SURPRISE THERE!

Tony   October 10th, 2008 9:25 pm ET

MANY PEOPLE USE TO THINK MCCAIN WAS A MAN OF CHARACTER, CREDIBILITY AND RESPECT.

NOW HE HAS TRADED ALL OF THAT IN HIS LUST FOR THE RPESIDENCY.

WHAT A SAD, BITTER, ANGRY, PATHETIC OLD MAN!

lyn   October 10th, 2008 9:25 pm ET

McCain & Palin is incouraging their supporters to attact Obama, even one of them said kill him, the other saying that he would not vote for a black man, well let me tell you McCain & Palin supporters Obama Mother was a lovely White woman with a lot of love for all colour, race and it is very sad to attact Obama,Please he is working for all America to give us a better life for our kids, to put food on our table, a roof for our family, he is a good man, please stop attacting him. Political ticker please print my comment.

Donna A. Reuter, Bremerton, WA   October 10th, 2008 9:24 pm ET

Outsourcing jobs are one of the reason why our economy is hurting. You don't take good paying jobs from Americans and expect that they will have the same disposable income to drive our economy by their purchasing ability.

mitch   October 10th, 2008 9:22 pm ET

he wants to ,regardless if he said it or not. he just like bush.

Speider   October 10th, 2008 9:21 pm ET

I believe we are heading back into isolationism when it comes to import/exporting, global aid and military intrusions, which will affect the global economy and create a battle of economics for trading dollars.

In the end, as those of us with grandparents who went through the great depression of the 1930s have seen with them, the U.S. and other countries will start to ignore third world needs for our own survival.

Whomever becomes our next president, the weight of the world is upon their shoulders and they will have a huge amount of work to accomplish.

constance   October 10th, 2008 9:18 pm ET

What I have recently seen at McCain rallies worries me. If McCain and Palin think that the rhetoric that embraced McCain's campagne after Palin was choosen, the language that fires up these crowds is helping the American cause they are sadly mistaken. The level of anger and hatred and violent hate speech displayed at these rallies reminds me of an earlier darker time in our nations history. A time I pray to God we don't revisite. It actually turns off the many of us who are still making up our minds. And as everyone says we are the ones who will choose the next president. It is neither constructive to our national interest of getting this country out of this economic disaster or resolving the two wars we are currently embroiled in. It doesn't promote engagement and co-operation, it further fuels bi-partisanship. I believed McCain early on when he spoke of reaching across the isle and working together to heal and cure the problems that plague our country. Was that all just rhetoric? It distracts us from the very real problems we face as a society. Promoting fear and feeding hatred diminishes us all. We are Americans! We are better than this or are we?

Darryl Miller,   October 10th, 2008 9:18 pm ET

Senator John McCain and GOv Sarah Palin are planting the seeds of racial hatred to cover their own short comng and some Republican whites and blacks are too blind to see it..

adrian   October 10th, 2008 9:17 pm ET

not so misleading-
McCain's legacy is corporate tax breaks.

mark   October 10th, 2008 9:17 pm ET

He wants corporate tax breaks! If that means US corporations move overseas to be competitive, then he could care less!

Yes, he'll give tax breaks to US corporations that move jobs overseas!

Don't believe his twisted truth! He's suffering from Alz…!

Renee/kc   October 10th, 2008 9:16 pm ET

WOW…. I WOULD HAVE NEVER GUESSED THAT…UNLESS I WAS LIVING UNDER A "ROCK"

ohio   October 10th, 2008 9:14 pm ET

This guy is an idiot!!!!!!!!!!!

Barb   October 10th, 2008 9:13 pm ET

The candidates should stick to the political issues at hand, because the true fact is that our country has not dealt with the racial issues that still plague our society today. Therefore to some this presidential debate is about race and not who is the best man for the job. May God bless all of us.

Renae   October 10th, 2008 9:13 pm ET

I think McCain don't want any tax breaks for anyone, except the republicans. I am sick to my stomach about the hate that his party has about a black man running for president. I think it is a dirty low down trick to have 3 black men to get on TV and say how much they support McCain, I think it just shows how some people can't believe that a black man can be the president. I think the republicans, alot of them are racist and need to wake up! They would rather see this country fall apart over skin color. Some of those that work on Fox News, and a few on other news stations are so jealous, GET over it! Many people are not racist anymore. This is the best Election I have ever seen in my life and it really shows how racist and how much hate there really is today in the United States of America. Its an outrage and I will not vote for a racist president.

emma   October 10th, 2008 9:12 pm ET

I real wish mr Mccain can stop playing a negative campains me as he's surporter I am considering to vote for obama who seems to have a straits talk about the tough time that we are facing right now!

Unemployed in PA   October 10th, 2008 9:10 pm ET

I lost my job because the company I worked for (TransUnion) decided the tax breaks and cheaper employees would benefit their companies greed better. Not to mention other countries has access to millions of America social securities numbers.

58 white old ladies for OBAMA   October 10th, 2008 9:08 pm ET

WE HAVE THE FACTS.

THAT IS WHAT MCGREEDY VOTED FOR.

Brooklyn Boy   October 10th, 2008 9:06 pm ET

I agree Obama's statement, in my opinion, is not true. However, McCain's voting record speaks for itself, he has no interest in taking away the loopholes that encourage companies to send our jobs abroad and avoid paying taxes

Obama for Pres   October 10th, 2008 9:04 pm ET

McCain wants anything now that could help get votes. Betcha Sarah ain't fittin into that at the moment!

David   October 10th, 2008 9:03 pm ET

This is not the man we need at this time. He is, I am sure, an honorable person but his ideas have not worked. I do not know if Obama would be any better, but it can not be worse.

Stew   October 10th, 2008 9:00 pm ET

Sorry Nikki, it's Obama who is planting seeds of deceit. So much has been exposed on Obama. They should attach him to a lie-detector during the next debate!

Kimberly Duncan   October 10th, 2008 9:00 pm ET

Funny how when you are doing a fact check on Obama it is called misleading, and when you are doing a fact check on McCain it is called False. Wouldn't expect anything else from this liberal media.

BlahBlahBlah   October 10th, 2008 8:59 pm ET

McCain has demonstrated that he couldn't care less about US-based companies moving jobs offshore when he had Carly Fiorina join his campaign.

Ron was a REP now a DEM   October 10th, 2008 8:58 pm ET

Or the complexities of taxes for U.S. companies operating abroad. allow John McCain shadow of true. The days of tariffs are long gone and our country is feels the affects. Good companies like Wal- Mart started out selling mostly American goods since tyhe death of Mr. Walton the greed of the stock holders and company chairman are damaging the American worker.

Joe Sixpack   October 10th, 2008 8:58 pm ET

McShame would be better off saving the money he is wasting on fear mongering ads and put in the bank so he has money when he looses… oh yea hea can always sell on of the dozen or so mansions he owns that he did not know about…. Palin should take her phony religious coverup for a hatred racist self back to Alaska and go live in an igloo!

ines   October 10th, 2008 8:56 pm ET

McCain can't keep up the attacks after Palin was found to have violated the trust in the troopergate case. McCain can't go on. The best thing for him to do is to start finding any bit of integrity he has left and use it for the good the next few weeks.

JeanR   October 10th, 2008 8:56 pm ET

What does McSame wants to do about it. He needs be clear on that

Niki   October 10th, 2008 8:50 pm ET

John McCain and Sarah Palin are responsible for planting the seeds of suspicion from which hatred has grown.

John   October 10th, 2008 8:50 pm ET

Republicans always seem to give corporations whatever they want, thinking that in good faith they in turn will reinvest domestically. The only thing they seem to reinvest in are the pockets of their lobbyists, CEO, and Board of Directors.

Dan   October 10th, 2008 8:46 pm ET

misleading? "if you don't favor undoing something, does that mean you're in favor of doing it?" Now that is misleading.

joec   October 10th, 2008 8:44 pm ET

It's either naive or deceptive for McCain to say that jobs shipped oversea has no impact on our economy: job loss, primarily. Obama is, perhaps, oversimplifying the issue, but who can blame him? Whenever he takes the more "scholarly" approach to explain things, he gets criticized for being boring. Well, sometimes the truth is lost in boring talk; our eyes roll back in our heads and we start daydreaming about next year's vacation (Ooops! We can't afford next year's vacation). If you don't take away their tax breaks for shipping jobs overseas, you are in a sense in complicity with that strategy.

Ken in NC   October 10th, 2008 8:41 pm ET

If a company moves it's operations, Administrative and/or Mfg, overseas then it should no longer have available to it, tax breaks given to US based companies. if it imports it's products into this country there should be an import tax levy that is equal to but not greater than the difference between it's last listed US wholesale price and the listed import wholesale price.

I do not like this because it is a form of protectionism but I feel our nation must be first in favor of our own US workers. Consideration must also be given to the fact that some countries also subsidizes businesses in mfg. making it easier and cheaper for companies to produce and sell their products in this country and as such it is to me an unfair imbalance that can only be detrimental to our economy.

OOOppss, Did I say "COULD BE"? I should have said has already been detrimental to our economy.

paulc   October 10th, 2008 8:40 pm ET

It would certainly seem that the U.S. should uncomplex the tax laws for U.S, companies operating abroad to level the playing field and prevent confusion.
The companies moving manufacturing jobs overseas should be required to pay U.S. level wages (or be taxed that amount) to those workers. This may reduce the incentive for the movement of jobs.

K.Somers   October 10th, 2008 8:37 pm ET

I don't think McCain remembers from day to day what he has said or promised anymore.

The 9th inning attack ads are a sign of a sinking ship. Next the rats will be leaving the ship. You will hear Hannity or Limbaugh say they never liked John McCain anyhow in the near future…

Moe, NY   October 10th, 2008 8:31 pm ET

I am sure McCain wants to continue the tax breaks for Corporate America, I mean, after all, look at the Lobbyists in his campaign.

Judi   October 10th, 2008 8:31 pm ET

Well, how bout that … Mc Cain, mimics Bush, and Palin apparently mimic Cheney…. Gosh darn it! !!!!!!!!

Tired of Obama   October 10th, 2008 8:29 pm ET

Hussein will say ANYTHING to be elected into the anals of History. Fellows Americans…please do the right thing for your country. Vote against this wolf in sheep's clothing.

California Gold   October 10th, 2008 8:28 pm ET

McCain has yet to convince me he votes my interests over businesses. The record and flood of American businesses overseas (like Haliburton to Dubai) is too big an elephant to ignore.

McCain your actions are speaking so loudly I can't hear your words.

Mike from Calgary   October 10th, 2008 8:25 pm ET

McCain has said nothing - he gpes along with Bush Policy that provides incentives to move business overseas (to avoid US tax) and to export jobs.
McCain has said nothing LATELY whereas OBAMA CALLS FOR CHANGE.
YOUR ANSWER IS MISLEADING! OR INCOMPLETE!

Mel in GA   October 10th, 2008 8:25 pm ET

Tell that to a UAW member…. Manufacturing JOBS are being lost in record numbers and UAW workers have been suffering ever since the end of 2001; any vote for giving taxbreaks to companies that ship jobs overeas is a disgrace to the respective industries in the U.S.

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