Economically clueless doubletalk--even with a teleprompter

President Barack Obama and (tax evading) Treasury Secretary Tim Geithner made a joint announcement on Monday of a comprehensive government effort to catch and prosecute--what else?--tax evasion.

And against that backdrop of powerful irony, the two men put on a brilliantly Orwellian display of doubletalk that suggests either economic ignorance or a desire to deceive. If not both.

I haven't located a transcript yet, but the White House proudly posted a video at YouTube:



See first how Geithner worked from a few pages of notes. But you can see the teleprompter early on in the video, followed by Obama's head angling back and forth from one teleprompter screen to the other. Not the sort of press announcement Obama wishes to leave to chance, apparently.

Obama opines that the tax code makes taxes lower on a company for creating a job in India than for creating one in Buffalo, NY. But doesn't that make perfect sense? What reason does the government have for taxing a company's overseas operations other than as a form of economic protectionism? Well, no surprise, protectionism lies at the root of this tax policy. Obama wants the same company to create a job in Buffalo instead of in India. Taxes are not going down for the company if it creates the job in Buffalo. Instead, the company will be punished (taxed more) for creating a job overseas.

That policy attempts to artificially increase the expense of foreign labor. As simple as that.

And who will buy American products overseas? Probably not the jobless guy in India.

Naturally, Obama does not describe his policy as protectionist. One puts the best face on a policy like this by emphasizing that collecting more in taxes saves money.

He really does say that. No, I'm not kidding. He really does say that.

Now, it is rather obvious that the company paying more in taxes is not saving money. So who is saving money? The government? Well, not exactly. The government is taking more money, not saving it. The answer is, of course, in the vein of Leftist populism. The new policy saves you money! It's very simple. If those evil big companies give somebody a job in India and pay less in taxes, then the government has to have money from somebody, and that somebody is you! So the government is taking more money from them for you!

Doesn't that give you a warm and snuggly feeling, knowing that the government cares about you so much?

Bottom line--and those who think this policy is a good thing need to pay particular attention here--it is far more important that tax policy assist economic prosperity than it is that tax policy be "fair."

It is better, in other words, for a nation to have broad prosperity with a big difference between its richest and its poorest than it is for a nation to have economic malaise with everyone earning the same.

Obama's rhetoric on tax policy is laced with Leftist ideology.

You want to keep U.S. companies creating jobs in the U.S.? Keep their taxes low so that foreign tax havens do not look so attractive. It's that easy.

US business leaders have already sharply criticized the plan [Los Angeles Times report], saying it would actually harm the US economy. Foreign governments, such as the Netherlands, have reacted with surprise [Radio Netherlands report] at being named by Obama as a corporate tax haven, along with Ireland and Bermuda.
(Jurist)