Mark Bloomfield Comments on Sen. Kerry's Tax Policy Announcements

"Nightly Business Report" interviewed Mark for its March 26 broadcast. A transcript of NBR's coverage of Sen. Kerry's announcement, which includes Mark's comments, is available below.

Democratic Presidential Hopeful John Kerry Promises Tax Breaks & Jobs

Nightly Business Report
March 26, 2004

SUSIE GHARIB: Democratic Presidential nominee John Kerry took the wraps off his economic plan today. Speaking in Detroit, where unemployment is well above the national average, Kerry promised to create 10 million jobs over the next four years and to eliminate tax laws that encourage companies to move jobs overseas. Darren Gersh reports.

DARREN GERSH, NIGHTLY BUSINESS REPORT CORRESPONDENT: It is an unusual move for a Democrat, calling for a five percent cut in the corporate income tax to spur job creation at home. But there is a catch. Kerry`s plan raises $12 billion by ending a tax break for U.S. companies that park their foreign income in tax havens overseas.

SEN. JOHN KERRY (D-MA), PRESIDENTIAL CANDIDATE: If a company is torn between creating jobs here or overseas, we now have a tax code that tells you go overseas. And that makes no sense. And if I am president, it will end as soon as possible.

GERSH: The White House dismissed the plan as a tax shell game. But it clearly puts Kerry on the offensive.

CHRISTOPHER BERGIN, CEO, TAX ANALYST: My first reaction is this is mostly good tax policy and very good tax politics.

GERSH: Tax analysts say Kerry is proposing to eliminate what is best described as an IRA for corporations, allowing them to defer U.S. taxes on foreign income that stays overseas. The plan splits the business community, which likes the lower rates, but worries Kerry would make it more expensive to invest where it is most efficient to produce.

MARK BLOOMFIELD, PRESIDENT, AMERICAN COUNCIL FOR CAPITAL FORMATION: What he is doing is arbitrarily building a barrier, which violates the number one rule of economics, which is comparative advantage.

GERSH: The Kerry campaign says the plan would exempt companies that produce overseas in order to sell overseas. But no other country in the world taxes corporations on the money they earn abroad and analysts say this could force U.S. multinationals to offshore themselves.

CHRIS EDWARDS, DIRECTOR, TAX POLICY, CATO INSTITUTE: It will actually scare the corporations away and they will put their headquarters in Europe or Asia, Ireland and other places with more competitive tax systems.

GERSH: Others say the plan would make the tax code fairer for domestic corporations, though it won`t create many jobs.

BERGIN: The code is not the best way to attack the job loss problem. I mean, quite frankly, jobs are going overseas because it`s cheaper for companies to pay people overseas.

GERSH: With the White House gearing up to attack Senator Kerry`s voting record on tax increases, analysts say this new plan is as much about creating tax cutting credentials as it`s about creating new jobs. Darren Gersh, NIGHTLY BUSINESS REPORT, Washington.