CNN

Will McCain offer tax cuts for outsourcing?

The Statement
At a campaign stop Thursday, October 23, in Indianapolis, Indiana, Sen. Barack Obama said Sen. John McCain had "made kind of a strange argument that the best way to stop companies from shipping jobs overseas is to give more tax cuts to companies that are shipping jobs overseas. More tax cuts for jobs outsourcing, that's what Senator McCain proposed as his answer to outsourcing. He said that's, quote, 'simple, fundamental economics.'"

Get the facts!

The Facts:
Obama was referring to remarks McCain made on CNN's "The Situation Room" on Wednesday, October 22. CNN's Wolf Blitzer asked McCain about his plan to cut the corporate tax rate from 35 percent to 25 percent.

In part of his answer, McCain noted that when many companies "have the ability to go overseas, unfortunately they do go overseas," because there are tax incentives in those countries to do so. "If they go to Ireland, they're only paying 11 percent (taxes)," he said. "So where are they going to go where they can create wealth and create jobs? It's simple fundamental economics."

McCain added, "So, to somehow allege that a company or corporation that can be international is not going to go where they pay the lowest taxes and can create the most jobs is just foolishness."

At no point did McCain propose "more tax cuts for jobs outsourcing." When asked for evidence to back up Obama's assertion, the Obama campaign sent CNN a statement arguing that McCain's plan "does not eliminate the provision in the tax code that encourages U.S. companies to outsource jobs," and that the across-the-board tax cut McCain is calling for "would reward companies even if they fail to create a single new job or make a single new investment in the United States." Neither of these comprises offering "more tax cuts for jobs outsourcing."

McCain and Obama disagree over how to handle the issue of outsourcing. McCain argues that lowering taxes inside the United States will give companies incentives to keep, and build, operations inside the United States. Obama calls for cracking down on tax loopholes that encourage companies to shift
operations overseas, and offers a tax credit for companies that increase domestic operations.

The Verdict:
False. McCain is not offering "more tax cuts for jobs outsourcing." The quote Obama refers to comes from a CNN interview in which McCain argued that lower taxes could help prevent outsourcing.