MILLER: Biden: Tax the world

White House’s proposed global minimum tax would devastate the economy

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President Obama will follow anyone to the ends of the earth to get his tax dollars. If someone makes a buck in, say, Tahiti, the administration wants to dispatch an Internal Revenue Service (IRS) agent to the white beaches to bring back the 39 cents owed to Uncle Sam. The White House believes this somehow will solve unemployment here at home.

“We want to create what’s called a global minimum tax,” said Vice President Joseph R. Biden Jr. at a fundraiser in Iowa Wednesday. “American taxpayers shouldn’t be providing a larger subsidy for investing abroad than investing at home.” He also said Republican presidential frontrunner Mitt Romney “has proposed a new international tax system that zeroes out taxes for companies that create jobs outside the United States of America.”

Mr. Romney does not accept this charge. “Gov. Romney will reduce taxes on businesses to create an environment that encourages investment and job growth,” said the former Massachusetts governor’s campaign spokesman, Andrea Saul. “That includes a lower corporate rate, lower individual rates, and the elimination of penalties for companies that want to invest their international profits here at home.”

As for Mr. Obama’s record on keeping jobs at home, Ms. Saul said, “Since President Obama took office, America has lost more than half a million manufacturing jobs and claimed the title of highest corporate tax rate in the developed world.” The United States earned that dubious distinction Sunday when Japan lowered its levy to lure investment income.

A global tax would just compound the administration’s other failed economic policies. On top of the record-high corporate tax, Mr. Obama insists on maintaining a worldwide taxation system, which means American companies that earn profits abroad are taxed twice: first by the foreign nation and then by the United States on the difference in the foreign and domestic rates when the money is repatriated, meaning brought back home. So U.S. corporations leave profits overseas, under a rule called deferral, which has resulted in an estimated $1 trillion in investment money lingering outside of our economy.

Instead of working with congressional Republicans who are trying to lower the federal corporate tax rate to 25 percent and switch to a territorial system, the White House wants the IRS to chase down profits around the world. “If deferral ends, companies will have no incentive to remain in America,” explained Ryan Ellis, tax policy director of Americans for Tax Reform. “U.S. companies will re-incorporate overseas. Why pay the highest corporate income tax rate in the developed world if you don’t have to?”

Democrats refuse to accept that raising taxes has the opposite effect on keeping jobs here at home. Should the tax policies all stay the same and the global minimum tax is tacked on, expect to see huge corporations become foreign companies with a U.S. subsidiary.

Mr. Biden spoke as if American businesses were undertaxed. That’s not the case under Mr. Obama’s and Mr. Biden’s watch. On Jan. 1, 2013, “taxmageddon” will slap American businesses with trillions in tax hikes, including a slew of new Obamacare levies and the expiration of 100 percent expensing. Voters have one last chance in November to stop American companies from fleeing the country by electing a president who will quickly repeal these levies.

Emily Miller is a senior editor for the Opinion pages at The Washington Times.

 

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