Mitt Romney has been reluctant to discuss details of his economic and tax plans for good reason: The Romney-Ryan tax plan would encourage US corporations to ship jobs overseas by eliminating US taxes on profits from overseas operations.
Romney’s campaign website contains a brief description of his tax proposals including the proposal to switch US corporate taxes to a “territorial system.”
Simply stated, a “territorial tax system” means that profits for a corporation, or income for an individual, earned outside the US are not taxable. Read that again: Under the Romney-Ryan tax plan, all profit that a corporation makes from operations outside the US is not taxable. Ditto for an individual; any income an individual earns from sources outside the US (such as the Cayman Islands) is not taxable.
If this nation adopts the Romney-Ryan territorial tax plan, US corporations would rush to close operations in the US and move their operations overseas because profits earned from their overseas operations would not be taxable by the US government.
We already know that as head of Bain Capital Mitt Romney was a leader in closing US factories and shipping jobs overseas. Now we see that, as president, those “12 million jobs” Romney promises would be in China, Malaysia, Honduras . . . everywhere except the United States.