Fact Check: Does McCain want tax breaks for companies that send jobs overseas?
[cnn-photo-caption image= http://i2.cdn.turner.com/cnn/2008/images/10/10/art.mccain02.ap.jpg caption="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.
From CNN Politics
- More red states will help pay for all K-12 students to go to private schools
- 10 Cards Charging 0% Interest Until 2024
- Supreme Court humors itself as it considers whether Jack Daniel's can stop a dog toy company from parodying its brand
- US State Department ends assignment restrictions that were perceived as discriminatory
- Ramen noodles and drained savings: FEC weighs allowing candidates to use political cash to pay themselves bigger salaries
- Arkansas governor signs bill that restricts transgender students' bathroom use in schools
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.
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!
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.
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.
Well, how bout that ... Mc Cain, mimics Bush, and Palin apparently mimic Cheney.... Gosh darn it! !!!!!!!!
I am sure McCain wants to continue the tax breaks for Corporate America, I mean, after all, look at the Lobbyists in his campaign.
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...
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.
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.
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.
misleading? "if you don't favor undoing something, does that mean you're in favor of doing it?" Now that is misleading.
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.
John McCain and Sarah Palin are responsible for planting the seeds of suspicion from which hatred has grown.
What does McSame wants to do about it. He needs be clear on that
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.
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!
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.
McCain has demonstrated that he couldn't care less about US-based companies moving jobs offshore when he had Carly Fiorina join his campaign.
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.
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!
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.
McCain wants anything now that could help get votes. Betcha Sarah ain't fittin into that at the moment!
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
WE HAVE THE FACTS.
THAT IS WHAT MCGREEDY VOTED FOR.
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.