The Corner

Territorial Dispute

Last night, Vice President Biden said,

Governor Romney believes in this global economy — it doesn’t matter much where American companies invest and put their money or where they create jobs. As a matter of fact, in his budget proposal, in his tax proposal, he calls for a new tax. It’s called a territorial tax, which the experts have looked at, and they acknowledge it will create 800,000 new jobs — all of them overseas, all of them.

The transcript then records boos. Fact-checkers have raised some objections to Biden’s attack, but several of them (and arguably all of them) are understating the problem with what he said.

The “experts” he’s talking about appears to be one expert, Kimberly Clausing of Reed College (an Obama donor). The study, or at least its applicability to Romney’s proposal, is questionable for a number of reasons. For example, Clausing assumes that the corporate tax rate stays the same. But Romney says he wants to cut it substantially, which means that companies would have less incentive to transfer operations overseas.

Here’s the bigger problem: Biden is misrepresenting what the study found. Clausing does not find that no jobs would be created in the U.S. She doesn’t look at the question. The Associated Press, to its credit, gets this point right, quoting Clausing as saying, “My analysis does not speak to the effects on jobs in the United States.” AP doesn’t quite draw out what this fact means, which is that it is simply false to say that research has found that all of the jobs a shift to territorial taxation would create would be overseas. (If Biden had said that one expert has found that all of the jobs the proposal would create abroad would be abroad, he’d have been accurate.)

William McBride, the chief economist of the Tax Foundation, sent me an email this afternoon on the subject:

She did not look at the domestic employment effects, only jobs abroad.  She admits as much, but her study has been construed to fit the populist myth that job growth abroad comes at the expense of jobs at home.  That is patently false, and the evidence indicates otherwise.  Would it make sense to prevent Starbucks from expanding outside of Washington State?  Likewise, penalizing companies for doing business abroad only hurts American workers, consumers, and the larger economy.

Ramesh Ponnuru — Ramesh Ponnuru is a senior editor for National Review, a columnist for Bloomberg View, a visiting fellow at the American Enterprise Institute, and a senior fellow at the National Review Institute.

Most Popular

Politics & Policy

Students’ Anti-Gun Views

Are children innocents or are they leaders? Are teenagers fully autonomous decision-makers, or are they lumps of mental clay, still being molded by unfolding brain development? The Left seems to have a particularly hard time deciding these days. Take, for example, the high-school students from Parkland, ... Read More
PC Culture

Kill Chic

We live in a society in which gratuitous violence is the trademark of video games, movies, and popular music. Kill this, shoot that in repugnant detail becomes a race to the visual and spoken bottom. We have gone from Sam Peckinpah’s realistic portrayal of violent death to a gory ritual of metal ripping ... Read More

Romney Is a Misfit for America

Mitt’s back. The former governor of Massachusetts and occasional native son of Michigan has a new persona: Mr. Utah. He’s going to bring Utah conservatism to the whole Republican party and to the country at large. Wholesome, efficient, industrious, faithful. “Utah has a lot to teach the politicians in ... Read More
Law & the Courts

What the Second Amendment Means Today

The horrifying school massacre in Parkland, Fla., has prompted another national debate about guns. Unfortunately, it seems that these conversations are never terribly constructive — they are too often dominated by screeching extremists on both sides of the aisle and armchair pundits who offer sweeping opinions ... Read More

Fire the FBI Chief

American government is supposed to look and sound like George Washington. What it actually looks and sounds like is Henry Hill from Goodfellas: bad suit, hand out, intoning the eternal mantra: “F*** you, pay me.” American government mostly works by interposition, standing between us, the free people at ... Read More
Film & TV

Black Panther’s Circle of Hype

The Marvel Cinematic Universe (MCU) first infantilizes its audience, then banalizes it, and, finally, controls it through marketing. This commercial strategy, geared toward adolescents of all ages, resembles the Democratic party’s political manipulation of black Americans, targeting that audience through its ... Read More