With elections due in November for 37 of 100 seats in the US Senate, Obama has sought to project the tax incentive issue as a key policy difference between the Democrats and the Republicans.
Persisting with the theme of protecting American jobs President Barack Obama in his latest speech on the economy said that he would press for tax breaks only for companies that created jobs on United States soil and not those that created jobs abroad.
In a series of speeches across the U.S. over the summer, Mr. Obama also specifically mentioned “jobs of the future” going to countries such as India and China, and repeatedly underscored his intention to pre-empt that trend.
Addressing a crowd at Cuyahoga Community College in Parma, Ohio, on Wednesday Mr. Obama said, “For years, our tax code has actually given billions of dollars in tax breaks that encourage companies to create jobs and profits in other countries. I want to change that.”
He said that instead of tax loopholes that incentivise investment in overseas jobs, he was proposing a more generous, permanent extension of the tax credit that went to companies for all the research and innovation they did U.S.
His comments also followed in the wake of steps taken by the U.S. Congress to hike the fees for H1-B and L visas, mostly requested by Indian companies with U.S. operations. Following the passage of this bill and comments by its sponsor, Senator Charles Schumer, criticising companies such as Infosys for being “body shops,” Indian companies and industry bodies such as NASSCOM had warned of the negative fallout of protectionism.
In a reference to White House plans announced this week to help the economy grown and spur hiring by businesses, Mr. Obama noted that it was encouraging companies “to invest more in the U.S” was the key to job creation.
As part of this plan all American businesses would be allowed to write off investments made in 2011, a tax break designed to aid small businesses in upgrading their plants and equipment.
Yet at the heart of this scheme would be redirecting investment towards jobs created within the U.S. rather than abroad. Touching upon this feature of the policy Mr. Obama said, “If we are going to give tax breaks to companies, they should go to companies that create jobs in America -– not that create jobs overseas.”
He said that in fact such making this distinction was one of the key differences between the Republican vision and the Democratic vision for the economy and the country. “That’s what this election is all about,” Mr. Obama added.