The Obama Administration has announced plans to increase taxes on American businesses with foreign operations. Generally, taxes would increase on these firms’ foreign profits.
So assume you’re the CEO of such a firm. Well, if we move American employees overseas the profits of our foreign divisions would decrease. Voila, decreased taxation!
Unfortunately, this obvious reaction escaped the Obama Adminstration. It didn’t escape Steven Ballmer, CEO of Microsoft. Bloomberg quotes Mr. Ballmer, “It makes U.S. jobs more expensive…We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
Perhaps Mr. Ballmer is now having buyer’s remorse. He was a $100,000 contributor to Mr. Obama. I try to keep politics out of a tax blog, but generally there’s a reason that Democrats are known for ‘tax and spend’ politics. And it’s happening again.