The accusations and statistics about taxes bandied about by both candidates last light during the first Presidential debate were somewhat astounding.
One particular exchange caught my attention:
Obama: ....But I also want to close those loopholes that are giving incentives for companies that are shipping jobs overseas. I want to provide tax breaks for companies that are investing here in the United States....Right now, you can actually take a deduction for moving a plant overseas. I think most Americans would say that doesn't make sense. And all that raises revenue.
Romney's Response was incredulous:
Romney: ...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. . . . But the idea that you get a break for shipping jobs overseas is simply not the case."
As I listened to the exchange I assumed that the President was stating that there was a separate stand-alone provision in the code that had special deductibility rules pertaining to companies that move facilities overseas--which I had never heard of before. Of course, with the Internal Revenue Code consisting of more than 5,000 pages and over 70,000 pages of interpretive regulations, I assumed that the President was right.
In reality, there is no "special" or stand-alone provision that, in the president's words, gives "incentives" to companies to move plants overseas. Any cost of doing business is deductible and so a company can claim a deduction whether it's moving operations to New York or New Delhi.
