KING 5 Ad Watch: Would Rossi encourage sending jobs overseas?

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by ROBERT MAK / KING 5 NEWS

KING5.com

Posted on September 13, 2010 at 6:40 AM

Updated Tuesday, Sep 14 at 11:39 AM

Sen. Patty Murray's commercial attacks Republican Dino Rossi on two fronts:  Jobs and campaign money.

Commercial: "Corporate lobbyists held a fundraiser for Dino Rossi in Washington D.C."

This first statement is true (there was a fundraiser) but here are the facts.  The 'corporate lobbyists' would be the U.S. Chamber of Commerce.  Back in D.C. in July, the Chamber's political group held a fundraising breakfast to raise money for Rossi.  But Murray has raised plenty of corporate money herself.  Her top donors include Microsoft, Boeing, Weyerhaeuser, Amgen and United Airlines just to name a few.

Commercial: "Now, Dino supports keeping tax loopholes for corporations that send our jobs overseas."

This claim is not so simple.  In August, you may remember our state and many others were asking the federal government for help.  States are facing huge budget problems and were counting on extra money for Medicaid.  Back in D.C., Democrats led by Senator Murray, pushed through a $26 billion bill, sending money to help states pay for health care, teachers and public employees. 

Here's the key:  To help pay for that bill, Democats got about $1 bil. a year by restricting what are called 'foreign tax credits.'  Every year, individuals and companies based in the United States, that make money overseas, take about $90 bil. of these tax credits.  Democrats call this a loophole and say these credits encourage companies to ship American jobs overseas.

Republicans don't see it that way at all.  "That's complete nonsense, I want to see jobs created here, in Washington state and in America," Rossi tells KING5.

Republicans say these credits aren't really loopholes.  The U.S. government has had some form of foreign tax credit for more than 90 years.  The original idea was to make sure corporations and individuals doing business overseas weren't being taxed twice.  So the U.S. has given them credit for taxes they pay in other countries.  Republicans say if you reduce those credits, that's essentially a permanent tax hike on American companies.

Rossi has signed a "Taxpayer Protection Pledge" that he will not support any increase in taxes or any net reduction in credits.  Republicans say reducing credits makes American businesses less competitive and instead of encouraging them to stay here, it might actually push them to move entire operations overseas.

Commercial: "Rossi thinks it's OK to encourage corporations to build plants in China, or move work to Mexico rather than save American jobs."

Bottom line, this claim that Rossi thinks it's OK to encourage outsourcing is a stretch.  The real issue here is a dramatic difference in opinion on these foreign tax credits.  And even economists do not agree on how these credits influence American jobs going overseas.
 

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