(Bloomberg) Democratic presidential candidate Hillary Clinton proposed rescinding tax relief and other incentives retroactively for U.S. companies that move jobs and operations overseas.
Clinton unveiled the proposal, aimed at encouraging firms to invest at home, in a speech on Friday at Detroit Manufacturing Systems, an automotive supplier. It would apply to incentives including the R&E tax credit and the Section 199 domestic production deduction and may date back "several previous years," her campaign said in a statement.
“If a company like Nabisco outsources and ships jobs overseas, we’ll make you give back the tax breaks you receive here in America,” Clinton said. “If you’re not going to invest in us, why should taxpayers invest in you? Let’s take that money and put it to work in the communities that are being left behind.”
Clinton’s proposal is the first of its kind at the federal level, though New York, Indiana and Washington have considered similar measures for companies that take advantage of their development incentives and then leave the state or do not meet the purpose of state support, her campaign said.
A Clinton aide said that the idea for the "clawback" emerged from her discussions with economic advisers aimed at encouraging economic patriotism. Clinton has also proposed an exit tax on companies that invert and a crackdown on companies that shift profits abroad to avoid U.S. taxes, a practice known as "earnings stripping," it said.
Clinton’s speech, described by senior policy adviser Jake Sullivan as outlining a “new bargain for a new economy” that puts American workers before special interests, comes ahead of a string of primaries across the Midwest manufacturing belt.
Michigan votes on Tuesday and awards 147 delegates. Ohio, Illinois and Missouri have primaries on March 15 that will award a total of 455 delegates. New York and Pennsylvania vote in April.
In Michigan, Clinton has led rival Bernie Sanders by 20 points or more in recent polls, but he is making a last-ditch play to win or at least narrow the margin, hitting Clinton’s support of trade deals including NAFTA as he tours the state. Sanders planned to hold rallies Friday in Traverse City and Grand Rapids, and Saturday in Macomb County.
After Clinton’s support of trade deals, the Sanders campaign is also trying to score points against Clinton by pointing to a video from a 2012 visit to India in which she said “there are certain advantages” to outsourcing. Clinton spokesman Jesse Ferguson said it’s "no longer a surprise but it’s still disappointing that the Sanders campaign would attack President Obama’s policies, and attack Hillary Clinton for defending his agenda" during her time as secretary of state.
Republican presidential candidate Donald Trump has focused on limited wage growth and companies moving operations abroad because of high corporate tax rates. He has proposed cutting the maximum tax rate to 15 percent for all businesses and imposing a one-time 10 percent levy on overseas profit. He wants to eliminate the ability of multinational firms to defer U.S. income tax on overseas earnings that they haven’t returned to the U.S.
—With assistance from John Voskuhl.
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