Barack Obama obviously wanted to be President of the US. Unfortunately, Obama wants none of the responsibilities of the office. The buck is always stopped somewhere else, usually at the doorstep of George Bush. Obama blames George Bush for everything ad nauseum, recently extending the blame period from “the last eght years” to “the last ten years.” For the moment we’ll ignore that the economy went into the tank only after Democrats took office. We’ll ignore the fact that Barack Obama was a US Senator from 2005 to 2009. We’ll ignore the fact that Obama did absolutely nothing to rectify the wrongs that he now pins on Bush. It’s as though Obama’s Viagra wasn’t working and Obama was just an impotent US Senator caught all up in Bush rapture.
As unemployment rose to 9.6% Obama, the guy who says
… I also have a belief that we need to look forward as opposed to looking backwards.
does nothing but push all of us to look backwards. Accordingly, Obama took another shot at Bush:
“For a decade, middle class families felt the sting of stagnant incomes and declining economic security. Companies were rewarded with tax breaks for creating jobs overseas. Wall Street firms turned huge profits by taking, in some cases, reckless risks and cutting corners. All of this came at the expense of working Americans, who were fighting harder and harder just to stay afloat – often borrowing against inflated home values to pay their bills. Ultimately, the house of cards collapsed,” Obama said.
Democrats were dealing those cards, but let’s ignore that for now too.
Let’s look at this part- “tax breaks for creating jobs overseas.”
Actually, there is no such thing per se.
There is something called The Homeland Investment Act and International Tax Policy of 2004. It was one time tax holiday of sorts, not the permanent policy Obama would have believe it is. In fact, a Google search for “tax breaks for creating jobs overseas” doesn’t generate anything specific. The HIA appears to be Obama’s whipping boy (along with Bush, that is). The Wall Street Journal was more enthusiastic:
If you want a real life example of how tax cuts boost the economy, take a look at the Homeland Investment Act of 2004. This law allowed U.S. corporations to repatriate earnings from foreign operations back to these shores for one year at a reduced tax rate of 5.25%. Supporters argued that this tax cut would lead to an “in-sourcing” of jobs by luring corporate income parked in foreign vaults back to America. Those repatriated dollars could then be put to work for R&D spending, plant expansions, capital and technology purchases, or merely to improve balance sheets to the benefit of American shareholders. We also predicted the measure would increase tax receipts because a 5.25% tax on several hundred billion dollars raises more money than a 35% corporate tax rate on nothing. Our only concern was whether the Treasury implementing rules were too restrictive.
Well, here’s what has happened: In nine months the law has increased the flow of repatriated foreign capital by a whopping $225 billion. J.P. Morgan estimates that another $75 billion will return to America in the fourth quarter. About half of these returning funds were profits from pharmaceutical companies and much of the rest from such high-tech firms as Dell, IBM and Intel. We can’t resist noting that this $300 billion of repatriated capital is nearly double the estimate by Congress’s hapless Joint Tax Committee, which had assured us this time last year that not a dime more than $165 billion would arrive. To quote Britney Spears: Oops, they did it again.
Four years later another study found a similar conclusion:
The Homeland Investment Act of 2004 provided for a one-time tax holiday on the repatriation of foreign earnings, thereby allowing U.S. multinationals to access earnings retained abroad at a lower cost. Firms responded to this act by significantly increasing repatriations from foreign affiliates.
Even the NY Times, through bitterly clenched teeth, admitted
Indeed, the study praises the companies for not spending the money in other ways, such as raising executive pay or investing in noneconomic projects. And it concludes that the American economy may have been helped by the act.
“Although the H.I.A. does not appear to have spurred the domestic investment and employment of firms that used the tax holiday to repatriate earnings from abroad, it may still have benefited the U.S. economy in other ways. The tax holiday encouraged U.S. multinationals to repatriate roughly $300 billion of foreign earnings and pay most of these earnings to shareholders. Presumably these shareholders either reinvested these funds or used them for consumption. Either of these activities could have an effect on U.S. growth, investment and employment.”
Barack Obama seems utterly incapable of understanding how business works.
Businesses do not exist to create jobs. They exist to make money, to make a profit.
Obama speaks of “leveling the playing field.”
The hourly compensation costs for all employees in the US in 2008 was $32.26. For China, it was $1.36 in 2008.
Let’s see Obama level that playing field.
And what has Obama done about those Wall St firms who turned those huge profits by taking reckless risks by cutting corners at the cost of working Americans?
Heck of a job, Obammie.