Obama Whiffs when it comes to Manufacturing Jobs

President Obama’s inane proposal to change the corporate tax code to incentivize manufacturing jobs in the U.S. encapsulates the Obama economic record in a nutshell.

Economists agree that our corporate tax rate is too high and that it contains a perverse incentive for corporations doing business overseas to keep those profits abroad, rather than bring them home to be invested in the United States. We are alone among countries in the developed world in having such a convoluted incentive structure. Congressmen of both parties have come together to propose eliminating it.

Obama will have none of it. Instead, he offers a more complex yet less effective plan to encourage the creation of manufacturing jobs here, involving punishing companies that happen to be successful abroad and creating myriad tax rates depending on if a company is a regular manufacturing company, a tech company, or neither. Oh, and if you locate in certain areas you also get a tax break.

These lines are not necessarily black or white—consider what happened when Congress decided to give manufacturers a lower tax rate in 2004, known as section 199: industries with well-placed lobbyists such as the software and motion picture sectors managed to get included in the deal.

Obama’s plan begs for more of the same, and lets the government pick favorites—and this administration is about nothing if not bestowing its supporters with largesse.

Helping manufacturing is a worthy goal and the tax code is the right place to start. Unfortunately, this administration remains beholden to its class attack mindset from the 2008 campaign and continues to govern that way, even when an economically superior, bipartisan solution is readily at hand.