Each campaign accuses the other of supporting policies that send jobs elsewhere. An Obama ad shows Romney telling an audience, “I understand why jobs come and why they go,” while a Washington Post headline states that “Bain’s firms sent jobs overseas,” referring to Romney’s time running the private equity firm Bain Capital.
Romney answered with his own ad accusing Obama of lying about Bain shipping jobs overseas. It quotes the Washington Post as saying the ads were “MISLEADING, UNFAIR and UNTRUE” (Romney caps).
Either way, it's indisputable that America has lost millions of jobs, some of which have been sent to China, India, Mexico, and other nations. What to do about it?
In his State of the Union message in January, Obama proposed eliminating the corporate tax break – that is, the business deduction – for producing goods overseas. “That money should be used to cover moving expenses for companies that decide to bring jobs home,” said Obama.
But if the company is manufacturing in the US, Obama proposed a larger tax deduction, which would be even higher if a company were to open a factory in a town that had suffered as a result of an earlier closure.
Romney opposes the proposal. He says “liberal politicians” who propose that solution don’t understand that raising taxes on corporations will make them less competitive in overseas markets, “making it bad for their business overseas, and also for jobs here.”
Why would it be bad for jobs here? According to Romney’s reasoning, sales overseas – even with goods made overseas – often support high-paying jobs in finance, research, and management at home. “And if a company's tax burden under such legislation grew too high, it could simply move overseas to avoid it – resulting in a loss of tax revenue for the US, not a net gain,” he says.
