Obama’s Tax Increment Plans can Harm US Employment, says Microsoft
President Obama’s plan of increasing corporate taxes has brought the administration unsolicited lectures from Microsoft CEO Steven Ballmer. The latter stated that Washington policy-makers might frown at the consequences of higher taxes.
The CEO claims that if Congress will heed Obama’s plans of implementing higher corporate taxes, a logical step for Microsoft is to move jobs offshore.
According to Bloomberg News, Ballmer said that “It makes U.S jobs more expensive.” He further added, “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”
The President proclaimed a plan last month to revise tax law by hindering US based multinational companies from deferring and moving their incomes abroad, which decreases their tax.
Unlike other countries, United States’ corporate tax system charges companies’ offshore profits and also makes them pay the foreign taxes on that income. This platform makes companies in the US less competitive compared to companies based in other countries which are not subjected to double taxation. One way to make the situation better is deferred taxation.
If this option will be eliminated, companies will just be more open in considering relocation to more tax-friendly countries like Ireland.
This is the reason why business enthusiasts have disfavored President Obama’s Plan. According to The U.S. Chamber of Commerce, this will just impede U.S. economy’ growth and will cause job loss. While the National Foreign Trade Council called it “counterproductive”. 95,000 people from around the world work in Microsoft, 56,500 of which are in the United States.