Obamanomics

Now that it’s very likely he could become president, what does Barack Obama want for his economic policy? I’m not sure if this is real policy or just pandering.

Mr Obama’s plan would lower the corporate tax rate for companies that met criteria including maintaining their headquarters in the US, maintaining or increasing their US workforce relative to their overseas workforce, holding a neutral position in union drives among their employees and providing decent healthcare.
The lowered rate would be paid for by the abolition of tax breaks that encourage companies to shift jobs overseas. “In the last year alone, 93 plants have closed in Ohio,” Mr Obama said. “And yet, year after year, politicians in Washington sign trade agreements that are riddled with perks for big corporations but have absolutely no protections for American workers.”
Mr Obama’s plan met instant scepticism from otherwise sympathetic Democratic economists who said it would require a large regulatory apparatus to put into practice. They also said that companies could “game the system” by spinning off overseas subsidiaries in order to reduce the offshore-onshore workforce ratio.
They questioned whether it was necessary to provide incentives for employers to provide health insurance since Mr Obama’s healthcare plan would already mandate them to do so. Finally, Mr Obama has already tied up the estimated $10bn (€6.8bn, £5.1bn) in revenues that would be saved from abolishing tax incentives for multinational companies that retain their profits overseas.
“I would say that this plan is borderline unimplementable,” said a Democratic economist in Washington. “It is also puzzling. Normally presidential candidates only come up with plans that are unrealistic when they are losing. But Obama is now the favourite.”

Posted by on February 20th, 2008 at 12:04 pm


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