Kerry Targets Job Outsourcing With Corporate-Tax Overhaul
WASHINGTON -- Democratic presidential challenger John Kerry, looking to capitalize on growing discontent over job losses, is proposing a broad restructuring of the corporate tax code to prod multinational companies to invest more in the U.S.</br></br>The Massachusetts senator's plan, to be unveiled in a speech today in Detroit, would largely eliminate the tax break that lets U.S. companies defer tax payments on income earned abroad -- sometimes for a decade or more. That break costs the U.S. Treasury about $12 billion annually. Mr. Kerry would use the additional revenue to reduce the overall U.S. corporate tax rate to 33.25% from the current 35%.</br></br>The stick-and-carrot approach would encourage companies to shift more of their investments to the U.S., Mr. Kerry's aides said.</br></br>Mr. Kerry also would offer U.S. companies a one-year tax break to repatriate earnings now held overseas, a pot of money that the Congressional Research Service estimates at around $600 billion. During that year, repatriated earnings would be taxed at a 10% rate. Congressional Republicans have proposed similar tax holidays. Kerry aides didn't have an estimate of the amount of revenue they expect would be produced by that gambit.</br></br>But Mr. Kerry is counting on the money to pay for another part of his plan: a two-year, $22 billion employer tax credit that would cover payroll taxes for new employees. The credit would be available to manufacturers, "industries affected by outsourcing," and small businesses that employ fewer than 100 people.