Uncheckable Debate Claims: 12 Million New Jobs, Tax Deductions For Offshoring

by Categorized: Economy, Politics Date:

By 1:30 a.m. Thursday, three hours after the presidential debate ended, the cottage industry of fact-checking was on all-hands overtime.

Checkers said Obama overstated Romney’s tax cut — it’s not exactly $5 trillion, though the president was right that the former Massachusetts governor is failing to give any specifics.

Romney’s charge that Obama doubled the deficit was dead wrong, as was his claim that Obama would cut $716 billion from Medicaid spending, along with his charges about the health care panel limiting care.  Obama’s claim that he proposed a $4 trillion debt-reduction plan was a stretch.

Just about all the checkers caught those layups.

Overall, just as the clear consensus was a win for Romney, Obama had a better grasp of reality, if I’m reading the fact-checkerati correctly.  In fact, the president appears to have won the debate — if you only read the debate transcript and did not watch the event.

(Scroll down for links to some of the best fact-checking reports.)

But two of the boldest claims by Obama and Romney went largely unexplored, not because they weren’t important but because they’re so hard to check.

Romney, in his closing statement, said, “If I’m president, I will create — help create 12 million new jobs in this country with rising incomes.”

Twelve million jobs, based on what? No one knows because it’s just another version of the same, discredited, tax-cutting, supply-side thinking that led George H.W. Bush to call Ronald Reagan’s plan “voodoo economics.”

“Economic growth is a sort of magic asterisk,” said former Labor Secretary Robert Reich, a liberal partisan, in a Wall Street Journal video breaking down the debate. “It’s very hard to analyze this kind of plan.”

Putting job gains in perspective, the Tampa Bay Times’ Politifact.com points out the biggest private-sector net job gain in any administration since Kennedy was 20.8 million under Bill Clinton, followed by 14.7 million in the Reagan years. The only decline was George W. Bush, at negative 646,000.

Obama’s claim about tax breaks for multinationals was also a head-scratcher:  “Right now you can actually take a deduction for moving a plant overseas. I think most Americans would say that doesn’t make sense,” he said.

What was he talking about? The pundits said little about this. The 15-minute Wall Street Journal video, a debate between Reich and Romney economic adviser Glenn Hubbard that was better than the night’s main event, delved into the foreign tax question at the 8-minute, 20-second mark.

“I think what the president is referring to is the way we tax so-called multinational corporations,” Hubbard said, guessing that Obama was attacking provisions that let corporations return foreign profits to the United States without paying taxes. Hubbard favors that policy since he thinks companies that are already sitting on record piles of cash will hire more people if they get yet more cash into their coffers.

Hubbard was probably wrong about what Obama meant, since those tax amnesty programs are not chiseled in the tax code. Reich’s guess was that Obama was talking about “all kinds of tax provisions,” including, presumably, the  write-off of the cost of closing a U.S. plant.

Romney certainly didn’t let it go unquestioned. “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.”

Whoa! Here was Mitt Romney basically calling himself an off-shorer of jobs, and Obama didn’t bite.  Amazing.

On the other hand, if Obama had accused Romney of sending jobs overseas while he headed Bain Capital, the president would have been on thin ice, according to a detailed report in factcheck.org.

Obama might have been wrong, but he would have fared better in the debate.

Here are some fact-checking reports on the contest:

The Daily Beast, with links to other fact-checkers

Associated Press, comprehensive on what Obama and Romney meant, not just the facts

The New York Times had to be interactive, of course

USA Today

The New York Times, more analysis than fact-checking

Salon.com, skewed toward Obama

Politico.com, on the economy

Politico.com on health care

Factcheck.org, Twitter version

Tampa Bay Times Politifact.com

 

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6 thoughts on “Uncheckable Debate Claims: 12 Million New Jobs, Tax Deductions For Offshoring

  1. Scott

    Re: “Deduction for a plant overseas.” Clearly he was talking about not having foreign earned profits taxed until they’re repatriated. It’s not a “deduction” but rather a reduction in tax.

  2. Dan Haar Post author

    Why would he think the United States has a right to tax unrepatriated profits, and why would that represent a “deduction” for moving jobs overseas, since most of those profits come from operations that never were here?

  3. marknati

    I work for a company that sent my old job overseas what they do is they take deductions on all the cost of closing the US plant then ship the machine to there foreign plant and deduct that to.They buy stuff here write off as a loss and it overseas. This must stop.

  4. Dan Haar

    Sam and Marknati, which is it? You’re saying opposite things. I can look this up and post the right answer, but not today.

  5. Norm Deplume

    What Sam wrote is technically accurate, but also deceptive. A business can write off moving expenses whether it moves within the country or to another country. While there is no “special” tax deduction for moving offshore, businesses do get a deduction. Obama was correct, Romney was wrong. The Democrats in Congress tried to put a stop to this, but Republicans refused.

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