I Found That Tax Break Outsourcing Pioneer Mitt Romney Said Didn't Exist

Last night at the first presidential debate, Mitt Romney told many breathtaking lies. But one of the most ridiculous - and easily fact-checkable, was this:
MR. ROMNEY: [...] The second topic, which is you said you get a deduction for getting a plant overseas. Look, I’ve been in business for 25 years. I have no idea what you’re talking about. I maybe need to get a new accountant.

MR. LEHRER: Let’s --

MR. ROMNEY: But the -- the idea that you get a break for shipping jobs overseas is simply not the case.
We'll get to the meat of the matter in just a second, but first note this: Mitt Romney just admitted that he has shipped jobs overseas! If you follow his own logic, why would he need a new accountant with that knowledge if he weren't shipping jobs overseas (and thus be eligible for the break)? Of course, the fact is, Mitt Romney may well be eligible for many such tax breaks.

But the central fact was so wrong on Mitt's side, even Fox News had to acknowledge this:
Technically, companies can claim a deduction for the costs associated with moving jobs overseas.
Fox of course softens the blow by having a "yeah, but" moment after this. That is, yeah, but it's not a special tax break exclusively for companies moving jobs overseas. Yes, that's because offshoring expense in our tax code is treated like any other business expense, eligible for tax deductions. As the White House explained as part of President Obama's jobs package still being blocked by Republicans:
Removing tax deductions for shipping jobs overseas and providing new incentives for bringing them back home (revenue neutral): The tax code currently allows companies moving operations overseas to deduct their moving expenses – and reduce their taxes in the United States as a result. The President is proposing to change that. These deductions will be denied, and companies will no longer be provided deductions for moving their operations abroad. At the same time, the President is proposing to give a 20 percent income tax credit for the expenses of moving operations back into the United States to help companies bring jobs home.

For example: If a company was closing a plant to move that plant overseas and incurred $1 million in expenses – ranging from the cost of scrapping equipment to shipping physical capital to clean up costs – it could right now deduct those expenses, and get a tax reduction of $350,000 (assuming the firm faces the 35 percent statutory tax rate). The President proposes to eliminate this tax deduction. And, if a corporation moving jobs to the U.S. incurred similar expenses, the President proposes to provide that company with a tax credit of $200,000 to help offset these costs and encourage investment here at home.
Letting companies count offshoring expenses as part of business expenses that are tax deductible is very much a special break for those companies. So long as companies can count expenses for moving oddshore as a tax deductible expense, yes, Mr. Romney, you do get a break for shipping jobs overseas. Now go find a new accountant.


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