Well...
There is a big corporate tax bill in Congress now, which is likely to pass after the elections:
the House passed the American Jobs Creation Act ($130 billion over 10 years) in new corporate tax breaks, and the Senate has its Jumpstart our Business Strength Act (JOBS), which is very similar.
Now since the 1960s, the US has had a tax incentive for exports, first called DISC (Domestic International Sales Corporations), then FISC (Foreign International Sales Corporations), and now ETI (Exempt Territorial Income), the majority of those tax benefits work to the advantage of a handful of companies, and all three versions (FISC, DISC and ETI) were ruled to be in violation of GATT (General Agreement on Tariffs and Trade), the latest ruling of violation being in early '02.
Europe waited for Congress to fix the ETI until they finally decided to impose WTO-approved sanctions on the US, with tariffs increases for as long as the US does not comply.
But.
The House's Ways and Means committee 'decided' that for US corporations to remain compettitive abroad against foreign corporations which break tax and other laws, those US corporations must pay as little tax on foreign operations as possible.
Now note: this is another interesting parallel with the Bush military doctrine of pre-emption. The House postulates that because hypothetical foreign corporations would violate tax laws, US corporations must "pay as little tax on foreign operations as possible"
In other words, do to foreign corporations what they could do to us, potentially.
So what does that mean for US jobs?
Well if Honeywell for example, loses their export incentive under the contested ETI to expand their offshore operations, Honeywell will shift the manufacture of its products offshore by hiring local manpower and sell its products by and from those offshore branches/subsidiaries.
Close a plant in Bumpiss Indiana and open one in Bangalore India.
And US taxpayers are financing these initiatives through those two bills the House and Congress are pushing.
It's a beaut'....
On an unrelated note, my CEO got fired today. At long last...
