The White House and some in Congress favor tax breaks for companies that bring back jobs from overseas. It appears that most Americans do as well, which sets up a tension between job creation and an increased deficit.
According to Gallup:
Republicans and Democrats find rare agreement on giving tax breaks to businesses that bring jobs back from overseas and pressuring China for fairer trade.
What the poll does not address is the extent to which corporate tax breaks could rob the Treasury of tens of billions of dollars in anticipated corporate tax revenue — at least for the time begin. The theory that an increase in the jobs base eventually will trigger an increase in tax receipts may be true, but as regards the current situation, only in theory. Individuals enjoy tax breaks today that they did not have four years ago, and these tax advantages may continue. Jobs added now, if these tax breaks continue, will add to the population of Americans who have tax advantages that also keep Treasury receipts low. Corporations that create jobs, or bring jobs to the U.S. that cost more than if they remained overseas, may cut company margins.
The dilemma is part of an ancient argument about the extent to which taxes are regressive, as well as to which lower taxes stimulate the economy — and eventually the tax base. Many surveys show that Americans do not favor an ongoing high deficit. The Congressional Budget Office recently said the deficit would be more than $1 trillion for another year. Any proposal that cuts taxes at either the corporate or individual level could make that deficit worse, as federal government expenditures only come down slowly over the next two years, and then increase for the three years afterwards.
The Gallup poll shows that Americans want to bring jobs back to the U.S. But at what cost?
Methodology: Results are based on telephone interviews conducted Jan. 23, 2012, on the Gallup Daily tracking survey, with a random sample of 1,008 adults, aged 18 and older, living in all 50 U.S. states and the District of Columbia.
Douglas A. McIntyre
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