With the debate over the fiscal cliff heating up in Washington, President Barack Obama is doubling down on his attacks on Republican tax plans today, part of an ongoing attempt to cast his opponent’s economic policies as bad for the middle class. Politico’s James Hohmann reports that the Obama campaign is planning to highlight a new Tax Notes report, which finds that Mitt Romney’s plan to eliminate taxes on the foreign income of American companies would “significantly increase incentives for U.S. firms to move economic activity abroad,” and create 800,000 jobs overseas.
The Tax Notes findings are echoed in a new briefing from the liberal centre for American Progress Action Fund, which argues that Romney’s plan to move the U.S. to a “territorial” tax system, thus eliminating U.S. taxes on foreign profits, would amount to a $130 billion tax cut form multinational corporations over the next 10 years.
The attack neatly dovetails with Democrats’ relentless hammering of Romney’s personal wealth and business record, including his disputed role in outsourcing jobs overseas as CEO of Bain Capital, iIllustrating how the Obama campaign is pursuing a two-pronged strategy to paint Romney as out-of-touch with everyday Americans.
Here’s the key excerpt from the CAP briefing:
The former Massachusetts governor would make U.S. corporations’ overseas profits exempt from U.S. taxes. These profits are already treated favourably under the tax code compared to corporate profits that are earned and reported domestically, creating an inefficient bias toward investment offshore. The favourable treatment of profits that are reported offshore also creates rewards for corporations that shift profits (on paper) out of the United States to foreign countries, including tax havens such as Bermuda and the Cayman Islands.
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