President Wants to Change Tax Code So It Does Not Reward Companies That Outsource Jobs

by Frederick H. Lowe
President Barak Obama said during the State of the Union address on Tuesday that the U.S. tax code must be changed so it does not reward companies that outsource U.S. jobs to foreign countries.

"We should start with our own tax code," President Obama told a joint session of Congress. "Right now, companies get tax breaks for moving jobs and profits overseas. Meanwhile, companies that choose to stay in America get hit with one of the highest tax rates in the world. It makes no sense, and everyone knows it.  So let's change it. First, if you're a business that wants to outsource jobs, you shouldn't get a tax deduction for doing it."

President Obama said he met with John Heppner, president and CEO of Master Lock, a Milwaukee, Wis.-based manufacturer of padlocks that is an operating unit of Fortune Brands Home & Security, Inc. in Deerfield, Ill.
In the State of the Union address, President Obama said Master Lock brought back jobs back from China to company's unionized plant in Milwaukee. The factory now is operating at capacity for the first time in 15 years, Master Lock officials said in a statement released Tuesday.

The President said the tax code should reward companies that keep jobs in the United States."That money should be used to cover moving expenses for companies like Master Lock that decide to bring jobs home," said President Obama. Since mid-2010, Master Lock has brought back approximately 100 union jobs to its Milwaukee factory, company officials said in a statement.  

President Obama said it has become expensive to manufacture in China and America has become more productive. Master Lock returned jobs to Milwaukee because of improved access to skilled labor and because the company had the ability to innovate supply chain structure throughout  North America.

On another subject, President Obama ordered U.S. Attorney General Eric Holder to establish a Financial Crimes Unit to crack down on large-scale fraud and to protect people's investments.

"I am asking my attorney general to create a special unit of federal prosecutors and leading state attorneys general to expand our investigations into the abusive lending and packaging of risky mortgages that led to the housing crisis," the President said. "This new unit will hold accountable those who broke the law, speed assistance to homeowners, and help turn the page on an era of recklessness that hurt so many Americans."

Ralph B. Everett, president and CEO of the Joint Center for Political and Economic Studies, a Washington, D.C.-based think tank for black elected officials,  applauded  the President's speech.

"As the economic recovery continues to take hold, the American people want to know that we are not going to fall back onto the policies that brought the economy down in the first place," Everett said.

Here is a link to the entire State of the Union address.