KERRY, TAXES AND JOBS
July 27, 2004
Democratic presidential candidate John Kerry has pledged to create 10 million jobs if elected, but his tax plan will penalize corporations and discourage job creation, says the National Taxpayers Union Foundation (NTUF).
Though Kerry will cut the corporate tax rate by 1.75 percentage points, his promise to tax companies that "take jobs overseas" ignores the fact that it is federal tax policies that drive businesses abroad in the first place:
- The overall corporate tax rate in the United States is higher than any other industrialized nation except Japan.
- The United States is one of the only Western countries that still taxes foreign profits made by U.S. companies.
- Despite cries about "outsourcing," foreign firms send more office work to the United States than we export, resulting in a net value of $54 billion to the economy.
Another part of Kerry's plan, a tax credit for businesses that create jobs, will have little effect on employment numbers, because millions of jobs are created and lost each month.
The best ways to encourage job growth, according to NTUF, involve simplifying the tax code for corporations and doing away with scores of special-interest credits and deductions that prevent real competition between businesses.
Source: Pete Sepp, "Kerry's Tax Plan: Too Much Tinkering," Capital Ideas, National Taxpayers Union Foundation, May/June 2004.
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