Obama's Weekly Radio Lie

In his weekly radio address, President Obama came out with more lies. this time, the point of his address is that Republicans want to reward companies for shipping American jobs overseas. How dumb does he think the American people are?

Obama said that he wants to end "tax breaks" for American companies that create jobs overseas. Since Obama, as usual, does not say what those supposed tax breaks are, we should take a closer look at them. Right now, a US based corporation does not pay US tax on profits earned overseas until it brings those profits back to the US. In other words, if Intel has a facility in India that earns $500 million dollars, Intel pays taxes to India; only if the profits are brought home to the US are they taxed. this has been the law for many decades. Why, you may ask, doesn't the US tax those profits immediately? It is a matter of keeping US companies competative. So, if a Chinese or German competitor of Intel also has a plant in India, that company pays only Indian taxes. If the US law is changed and Intel also has to pay 35% of its profits to the US, the tax rate for Intel's operations will be much higher than the taxes paid by its competitors. As a result, Intel will not be able to spend as much to improve its plant and it will be unable to compete with the others. So, absent this so-called tax break, American companies would not be able to compete with their overseas counterparts.

So what would be the outcome of getting rid of this tax break? would millons of jobs come back to the US? No. Instead, many of the largest companies would leave the US. It would be easy for them to move to a place like the Netherlands Antilles where the tax rate is 4%. sure, they would keep their US operations, but the taxes paid would come only from those operations. Even when profits were brought back to headquarters, the US would get nothing. As these companies became more international, there would be less growth in the US. So Obama's plan to end the so called tax break would have the effect of undermining the ability of US companies to compete in the world markets and it would drive many of the largest companies out of the country.

Obama, of course, does not tell you the real effect of the change he is proposing. Instead, he couches everything in the language of class warfare where he is preventing the rich corporations from getting tax breaks. the problem with Obama's idea of equality is that he has no desire to see everyone well off. He wants everyone poor and dependent on the government.

Obama has got to go!