Friday, July 29, 2011

Big Corp Tax Loophole Closer #26: Tax on Shipping US Jobs Overseas

I have three recommendations here for fairly and wisely raising tax revenues from companies that move US jobs overseas.

First, as a disincentivize for Big Corp offshoring of US jobs, I think all separation costs and all other costs, resulting from a plant closing or other US business closing, or in which a US plant or other US business is moved offshore, should not be deductible for federal income tax purposes by the corporation moving its US plant or other US business offshore.

Second, any US Big Corp manufacturer moving its plant overseas should get a reasonably computed and fair tax recapture of its Domestic Production Activities Tax Deduction for all past years in which it received this very lucrative tax deduction (this tax deduction started in 2005).

I find it hard to understand how US Big Corp manufacturers can think it’s perfectly all right to continue to reap the enormous tax benefits from the Domestic Production Activities Tax Deduction, and then to coldly close US manufacturing plants by moving them overseas to a low wage, low environment standard, and/or low-taxed foreign country.

So, US citizens pay twice. First, they help finance these substantial Domestic Production Activities Deduction tax subsidies granted to US Big Corp Manufacturers. And then, they subsequently lose their jobs when these same manufacturing companies move their jobs overseas. Just a horribly disgusting, heartless situation.

And then to pour salt on their open wounds, these same US Big Corp Manufacturers are now lobbying intensely for an 85% US tax holiday on their foreign earnings repatriation. Just incredible heartless greed.

And third, in all subsequent years, the Domestic Production Activities Tax Deduction percentage for companies that have moved US jobs overseas should be reduced.

The Feds can quantify what fair numbers would be related to my above last two recommendations related to the Domestic Production Activities Tax Deduction for these US Big Manufacturing Corps that move their US jobs overseas.

All of the tax proceeds here will be used to reduce the US Deficit.