President Obama today will criticize presumptive GOP nominee Mitt Romney for his support of a territorial tax system which, according to a commentary in the Tax Notes newsletter by Reed College economist Kimberly Clausing, “would increase employment in low-tax countries by about 800,000 jobs.”
The president will make the argument today that those overseas jobs would be created at the expense of jobs created in the U.S.
Romney is far from alone in endorsing a territorial tax system, which would allow the profits made by an American corporation in another country to escape U.S. taxation. In fact, a number of advisers to the president support the idea as well – including members of the President’s Export Council, the commission the president set up to recommend ways to reduce the deficit, and members of his Council on Jobs and Competitiveness.
In a letter to President Obama on December 9, 2010,the chairman of his Export Council, Boeing CEO Jim McNerney, writing on behalf of the private-sector appointed members of the Council, called for a “competitive territorial tax system for the United States,” one that “should broadly follow the practice of our trading partners and should not be designed to raise new revenue, or to destabilize the U.S. corporate tax base, but rather to make the US tax system more competitive with its major trading partners.”