- The Washington Times - Monday, March 29, 2004

The jobs programs offered by President Bush and Sen. John Kerry both start with a series of tax changes and add reforms in education, health care, energy production and other areas.

Mr. Kerry, Massachusetts Democrat and the presumed Democratic presidential candidate, would broadly restructure the corporate-tax code to remove incentives to move jobs and plants overseas and enhance incentives for creating jobs at home. His proposals would:

• cTax the money American businesses make at subsidiaries overseas producing goods for export at the same tax rate as goods produced in the United States by eliminating the ability of companies to defer paying U.S. taxes on foreign income.

• Enact a one-year tax holiday at 10 percent for corporations that repatriate an estimated $639 billion of profits they are harboring overseas to avoid paying taxes.

• Expand the new jobs tax credit for manufacturers, small businesses and other industries affected by outsourcing, providing a one-time exemption to employers for their share of Social Security taxes.

• Give small businesses a 25 percent tax credit for employee health care expenses.

• Cut tax rates for all corporations by 5 percent to 33.25 percent.

Mr. Kerry says his corporate tax cuts would be financed by closing $12 billion worth of corporate offshoring loopholes, including a provision that allows companies to set up headquarters in overseas tax havens.

Other proposals Mr. Kerry is championing would boost basic education and research, take a stronger stance on trade and wean the United States off its dependence on oil and other fossil fuels. The nontax proposals would:

• Bar government contracts to companies that move jobs offshore or engage in accounting fraud.

• Spur growth in industries such as nanotechnology and broadband, with the goal of connecting every American family to the Internet.

• Lower health care costs by helping businesses pay for catastrophic care cases, with more detailed proposals to come.

• Increase education and training of children and workers to suit job needs, with renewed emphasis on math and science achievement.

• Increase funding for the National Science Foundation and other government research programs.

• Transfer $25 billion to the states over two years to stop cuts in education, teacher layoffs and college tuition increases.

• Create a college-opportunity tax credit for the first $4,000 of tuition paid every year. Pay full tuition of students who give two years of service to America.

• Lower energy costs and create a half-million new jobs through a major renewable-fuels project aimed at attaining energy independence in 10 years.

• Step up enforcement of trade agreements with China and other countries that use unfair trade practices.

President Bush’s tax program is broader, more expensive and more sweeping in its impact on consumers and businesses. Its aim is to spur faster growth in the economy and create jobs. While it has boosted growth, few jobs have followed.

Mr. Bush wants to make $1.7 trillion of his tax cuts permanent, at a cost of an additional $1 trillion over 10 years, so they can finish the job.

The tax cuts include rate reductions for 92 million taxpayers averaging $1,083 last year; an increase in the child tax credit from $600 to $1,000; an expansion of the lowest 10 percent tax bracket; and a reduction in the “marriage penalty.”

Also enacted were tax incentives for business investment, a phase-out of estate taxes and a reduction in dividend taxes.

Mr. Bush is also offering a six-point program to help unemployed workers and lower costs for businesses so they can more readily hire new workers. The plan would:

• Create $3,000 “re-employment accounts” for unemployed workers to use to pay for retraining, child care, transportation, moving and other expenses associated with finding a new job.

• Lower health care costs by allowing small businesses to band together to purchase health care coverage, expanding medical savings accounts and reducing frivolous lawsuits against doctors and hospitals.

• Reform the class-action tort system to lower costs of frivolous lawsuits on manufacturers and other businesses.

• Increase energy supplies and reliability through legislation pending in Congress.

• Streamline regulation and reporting requirements that raise costs on businesses.

• Push for new trade-opening deals with countries around the world so American workers can produce more goods and services for export.

As part of his effort to open up trade, Mr. Bush is pressing China to stop artificially holding down the value of its currency against the dollar to gain an advantage over U.S. exporters. China has agreed to do so and is getting technical assistance from the U.S. Treasury.

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