Smart TaxesSmart Taxes

Obama: Give tax breaks for US jobs

The president plans to propose tax incentives to reward companies that create US jobs. He wants to end tax breaks for companies that send jobs overseas.

By MSN Money Partner Jan 13, 2012 1:56PM

This post is by Roger Runningen of Bloomberg.

 

President Barack Obama says he will propose new tax incentives to reward companies that invest in U.S. expansion or bring back jobs from overseas and elimination of tax breaks to companies that move jobs outside the country.

 

At a White House forum this week with representatives from more than a dozen companies, including Ford and Intel, Obama said more must be done to encourage business investment and job creation.

 

The tax initiatives will be part of the fiscal 2013 budget plan that is set to be sent to Congress the first week of February. The White House didn't release details. Obama also plans to propose adding $12 million for a program to promote foreign direct investment in the United States and work with state and local governments to attract businesses.

 

The companies at the event are among those that have decided to return jobs from overseas or increase their U.S. operations. (Post continues below video.)

"We are in a unique moment, an inflection point, a period where we’ve got the opportunity for those jobs to come back," Obama said in his remarks to the group at the White House. "The business leaders in this room, they’re ahead of the curve. They recognize it."

 

Economic growth and job creation are expected to be the main issues in the presidential campaign this year. Mitt Romney, the front-runner for the Republican nomination, is making criticism of Obama's stewardship of the economy a prime focus of his stump speeches.

 

The unemployment rate has declined for four straight months to 8.5% in December, and the Labor Department has reported six consecutive months of jobs gains of 100,000 or more. Still, the rate has been above 8% for almost two years, and little headway has been made in recovering the 8.75 million jobs lost as a result of the recession that ended in June 2009.

 

According to the administration, manufacturing production has risen at its fastest pace in a decade, with 334,000 manufacturing jobs created over the last two years and manufacturing production having risen by 5.7% on an annualized basis since reaching a low in the summer of 2009.

 

Obama said the United States is becoming more competitive for businesses because of productivity gains and rising costs for doing business in other countries.

 

"I don't want America to be a nation that's primarily known for financial speculation and racking up debt buying stuff from other nations," Obama said. "I want us to be known for making and selling products all over the world stamped with three proud words: 'made in America.'"

 

With wages in China rising between 15% and 20% a year, "the economics are favoring the U.S." for moving jobs back, Hal Sirkin, an outsourcing expert and senior partner at Boston Consulting Group, told reporters after Obama spoke.

 

Ford plans to add 12,000 jobs in the United States by 2015 and has brought additional production back to the United States from China, Japan and Mexico, according to the administration. The statement highlighted Intel’s participation in a $4.4 billion investment to build a semiconductor research and development facility in New York.

 

Along with Ford and Intel, companies taking part in the forum included DuPont, the largest U.S. chemicals company by market value; Otis Elevator; and the North American unit of London-based Rolls-Royce.

 

One of the business leaders at the White House for a roundtable discussion with administration officials was Angela Selden, co-chairman of Arise Virtual Solutions near Fort Lauderdale, which recruits workers for call centers.

 

Selden said in a telephone interview that she will urge the administration to appoint a special White House adviser to focus on bringing more virtual or Web-based jobs back to the United States.

 

There already has been a surge in U.S.-based new call centers as companies move them from India, the Philippines or Jamaica, according to Selden. U.S. workers’ familiarity with American culture results in greater customer satisfaction and cuts the number of calls needed to resolve issues.

 

"If I’m trying to get service for a snow blower, odds are very high" someone in India has never seen a snow blower, Selden said.

 

Arise, which expects $200 million in global revenue this year compared with $150 million last year, recruits workers to act as representatives of American companies from their own homes. Its clients include cruise line Carnival, Walgreen, Time magazine and the American Automobile Association.

 

About 22,000 of its agents are located throughout the United States, and Arise is hiring as many as 10,000 people this year in the United States, Canada and the United Kingdom, Selden said.

 

More from Bloomberg and MSN Money:

 

VIDEO ON MSN MONEY

21Comments
Jan 13, 2012 2:52PM
avatar

They don't have to choose one.  By its very nature of being proposed by a Democrat president, they will be against it no matter what, good or bad for this country.  The party of "anyone but Obama" CONS have made it clear.

 

Funny thing, if BUSH had done this, then they would be jumping for joy all over it.  But, then the DumboCrats would be completely against it.

 

Our Representatives have broken the system and it may well be beyond repair.

 

Jan 13, 2012 2:34PM
avatar
I don't know what rationale they'll use, but Republicans in Congress will be against this.
Jan 13, 2012 4:57PM
avatar

In fairness, half the problem is the reasons for not hiring keep changing.  One of the top stories on MSN today is that companies want to hire but hiring isn't happening because of a lack of qualified applicants.  It runs contradictory to the idea that companies are strapped for cash due to taxes, or too afraid of the future to move forward due to fear of regulations.  Tomorrow it'll be a lack of demand for goods, or instability in Europe, or Iran sneezing or something new.

 

Even if we assume any or all of those reasons aren't pure bovine droppings, it's hard to address an issue when you aren't sure what issue needs to be addressed, especially when there isn't a blanket solution (lowering corporate taxes won't stabilize the middle east or bring qualified employees to your door).  Sadly, that would require businesses to be completely honest as to their actions instead of using the unemployment rate to push for things they want but may not be related to hiring practices.

Jan 13, 2012 7:44PM
avatar
I lost my job at a support center to india. I think its a good Idea to give companies a break who bring the jobs back to the USA. Besides, having to call for help and than having to speak to someone outside the usa, its not that great,. Its not the language that is the problem, nor their accent. Its the fact they take out jobs. But its really not their fault, everyone wants to work. Its the companies fault who support the out of country outsourcing. Ever notice why AOL went down the tubes. Its because of support outside the USA. Of course they were other factors too. But that is one of them. Bringing jobs back here is not a  total solution , but it does help. Both in creating jobs, and building business. People are tired of speaking to a non american.
Jan 13, 2012 6:54PM
avatar
I'm assuming most of the thumbs down are coming from the ceo's and supporters of companies that have sold us out to the Chinese.
Jan 13, 2012 4:20PM
avatar

GOP will fight it for some reason or another.  Obama did offer tax breaks before in the negotiations and they ignored everything he proposed.  Said he did not put anything in writing.

Give me a break!

Jan 16, 2012 8:42AM
avatar
Having lost one IT job, with a major US firm to a group of IT workers in Manila (who we had to train in before the company laid us off) 7 years ago. Thinking I was safe when i landed a job with a fortune 100 company, only to be come a "token" IT worker in the US when they outsourced the Help Desk and 50 % of the IT  to India. (I remained only as a token as the company has DOD contracts that have to remain on shore). I say its about time somebody stands up for the American worker. Who is going to by your prescription drugs (opps your products) after all the jobs go to India and Manila.  True the workers over there only earn $10.00 per hour, but they take three times as long to do the jobs and make 4 times as many errors
Jan 13, 2012 7:04PM
avatar
Didn't this approach fail once already?  Trying it again will work why?

I own a small biz and would never hire someone based on the tax policy du jour; hiring is a long term decision for me and layoffs have never happened at my company.

We hire because we have profitable work that needs to be done.

Why not tariff a class of imports (i.e. electronics) to reverse/eliminate the job export savings and then use those tariff revenues to fund rebates to consumers who buy those products?  The consumer will then make the rational choice to buy the lower cost American made product and the jobs will insource themselves.  Am I missing something here?

Jan 13, 2012 6:57PM
avatar

Under the circumstances and obstructionist........This President continues to be the best President in modern history.  No body in the clown car could or would even compare.  The election is over.   Obama wins again.  Now all you overseas usa corporations.  Do what is right, be an example and bring your corporations home and get to work.  Pay your employees a fair wage with benefits, keep reinvesting in America, quit paying the ceo millions and billions, and tell your shareholders to not be so greedy.  Good Luck and BUY AMERICAN AMERICA.

Jan 15, 2012 9:55AM
avatar
I hope they start with phone service - I call a company to resolve a problem and sometimes can't understand the person on the other end.  That shouldn't be allowed, let alone "encouraged" to come home.
Jan 13, 2012 4:17PM
avatar
The unemployment claims went up again this month. I agree that we need long term fixes. The EPA is out of control. No one watching it but the Administration. The federal and local governments keep adding fees (note they never say taxes). Everything is getting more expensive. Labor (no labor is not going down), utilities, raw goods, etc. Yet, the government wants to figure out how to take more and more small chunks. My big chunk is gone so now I can no long pay all of the small chunks. What do I do as a small businessman?

Jan 13, 2012 5:28PM
avatar
This is the second thing he's announced today (along with eliminating departments) that makes him appear to be center-right -- which suggests that it's an election-year ploy. It certainly worked for Clinton in 1996. The thing is, both announcements would be positive changes if they actually were implemented, but they're just the tip of the iceberg and long overdue.
Jan 15, 2012 1:04AM
avatar
I suppose this idea deserves consideration, but it also needs to be watched very carefully. If the final legislation is filled with a plethora of loopholes and exemptions that it becomes meaningless, then don't even waste time talking about it. At the same time, companies are NOT untouchable. If something a company is doing rubs the wrong way, stop supporting that company through all means possible.
Jan 14, 2012 3:57PM
avatar
What people have to understand is that companies/corporations that have shareholders always work for "shareholder value"...they don't care about customers, employees, or long-term consequences as much as shareholder value.  Don't think that corporations are evil because they make a profit or that they outsource jobs.....if you must blame, then blame the greedy shareholders/investors [which is probably you who have a pension fund or a 401(k) who invests into such companies].  Corporations only work for share holder value, and the leadership of corporations are judged every 90 days by the shareholders & board of directors.  If the leadership does not perform to the greed level of the shareholders desire, then the leadership is voted out, and others are voted in to accomplish the earnings that the shareholder demand.  Corporations, generally are not evil like so many paint them as....they are just doing that which their shareholders want them to do, which is make a profit, raise value, and generally make money for the investors.  If that means out source jobs, then so be it.  If it is more profitable to in-source jobs, then that will be done...it's that simple.  If the state and federal governments understand this simple concept, then, and act upon it, then more jobs for legal Americans will materialize.
Jan 16, 2012 7:47PM
avatar
One thing we can start doing is buying from American companies. Did everyone know that CITCO is owned by the Venezuela's President  Hugo Chavez. You know, the dictator that hates America. I don't understand why we buy from him, . I will never buy from CITCO 
Jan 13, 2012 7:39PM
avatar
I'd say this certainly doesn't hurt, but I'm perplexed.  Isn't the left wing/Obama/OWS screaming about the inequality of just such programs?  I thought the evil corporations were getting a free pass already?  Someone explain other than politics how he can support this policy?  I think it is OK, but what I think is correct policy is hardly what the left thinks is correct.  Politicians on both sides pander to voters nearly 100% of the time and neither side will ever give their ideas a chance to play out as they switcharoo on everything whenever they think they can get a thumbs up from a needed block of voters.  Maybe it is time to do away with the two party system and politicians can feel better about voting their conscience and for what their constituents want and not play kiss **** with party politics all the time.
Jan 13, 2012 3:10PM
avatar

What, you mean target rewards at those that actually do what you want them to do instead of just assuming it will happen?  How groundbreaking. 

 

Too bad the republicans will probably try to squash it on the grounds of incrased beaurcracy over blind freedom to screw up.

Jan 13, 2012 3:16PM
avatar
It's not tax breaks businesess need in order to create jobs.  They need stability.  With impending regulations from EPA, NRLB and other government sources, businesses don't know what new regulations are coming or what the cost of those regulations will be.  To boot, Obamacare will create excess burdens on small businesses and force many to lay off workers and/or close their doors.  Where do you think most jobs are created in this country?  Small businesses.  A tax break is short term.  Businesses want to know, long term, what their obiligations are.  Anything short of that is lip service by the administration trying to give the illusion they care.  It's bull.  They want to cripple the free market system in this country, plain and simple.  Anyone taking Economic 101 can tell you that.  The problem with Democrats is they are reading from Obamics 101.  This story is just more propaganda.  The unemployment number only drops because 50,000 people a month are delisted in the numbers because they have stopped looking for work and are no longer receiving unemployment benefits.  Don't believe it, look up the numbers.  The percentage reported is just more of their bull.
Jan 17, 2012 11:31AM
avatar
Well M. Prez and congress you have had three years to implement and do this America jobs policy. Now you wait until it is election time to talk this junk. By the way realfairness - it was the demonrats that passed the free trade bill when they had a majority in congress. the repugnicans could not have passed this free trade without the help of the demonrats. They both are bought and paid for.
Jan 13, 2012 4:53PM
avatar
He keeps doing and suggesting things that will make the budget further out of balance.

Report
Please help us to maintain a healthy and vibrant community by reporting any illegal or inappropriate behavior. If you believe a message violates theCode of Conductplease use this form to notify the moderators. They will investigate your report and take appropriate action. If necessary, they report all illegal activity to the proper authorities.
Categories
100 character limit
Are you sure you want to delete this comment?

DATA PROVIDERS

Copyright © 2014 Microsoft. All rights reserved.

Fundamental company data and historical chart data provided by Morningstar Inc. Real-time index quotes and delayed quotes supplied by Morningstar Inc. Quotes delayed by up to 15 minutes, except where indicated otherwise. Fund summary, fund performance and dividend data provided by Morningstar Inc. Analyst recommendations provided by Zacks Investment Research. StockScouter data provided by Verus Analytics. IPO data provided by Hoover's Inc. Index membership data provided by Morningstar Inc.