Kerry’s Solution to Offshoring

Under the US tax system, companies that produce goods abroad wait until the capital reenters the country to pay taxes. According to Democratic presidential candidate John Kerry, this "tax holiday" structure has led to an increase in foreign investment at the expense of domestic business. In an effort to rebuild domestic industry and bring back jobs, Senator Kerry has proposed to discontinue the corporate tax breaks and lower domestic corporate tax. Supporters say that the proposal will end blatant inequalities within the tax system – but is unlikely to create many more domestic jobs. Critics contend, on the other hand, that businesses will suffer and that Senator Kerry is leaning towards an "isolationist" economic policy. No one disagrees that the US tax policy favors foreign investment; it is just a question of whether or not it is a good thing. – YaleGlobal