Obamateurism of the Day
posted at 8:05 am on May 8, 2009 by Ed Morrissey
When Barack Obama wanted to explain how multinational corporations that follow the rules are actually tax cheats, the president decided to use India as an example for tax havens. Unfortunately, as the Wall Street Journal noted yesterday, it appears that Obama has been getting his tax advice from his tax-evading Treasury Secretary:
President Obama revealed Monday that he’s half a supply-sider. If only someone could explain to him the other half. We have a tax code, the President said, “that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.” That sounds like a great argument for lowering taxes on the guy creating jobs in Buffalo. Alas, that’s not what he has in mind.
Set aside that India is a poor example to make Mr. Obama’s point, since its corporate tax rate on foreign-owned companies can be as high as 55%.
Oops! I guess Obama decided that he needed to pick on someone other than Ireland and the Netherlands, both of which fought back after Obama named them as eeeeevil “tax havens” for having the audacity to offer a lower corporate tax rate than the US … or India. Can’t anyone at this White House actually do research?
Maybe Obama didn’t get this example from Geithner. To be fair, he might have gotten it from Joe Biden.
Got an Obamateurism of the Day? If you see a foul-up by Barack Obama, e-mail it to me at obamaisms@edmorrissey.com with the quote and the link to the Obamateurism. I’ll post the best Obamateurisms on a daily basis, depending on how many I receive. Include a link to your blog, and I’ll give some link love as well. And unlike Slate, I promise to end the feature when Barack Obama leaves office.
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Only if it involves persecuting people who oppose HRH Obama.
bluelightbrigade on May 8, 2009 at 8:09 AM
Haha, research result in facts and figures, truth and perhaps reason.
Good one!
Grafted on May 8, 2009 at 8:10 AM
If this were a court of law the prosecuting attorney would have no problem getting a conviction for the WH lack of ability to do research.
doriangrey on May 8, 2009 at 8:13 AM
They don’t care to do research. They don’t have to. The media will carry their water to their lemmings who are thirsty for all things Obama.
SouthernGent on May 8, 2009 at 8:15 AM
BidenDumb,
and,
ObamaDumber!!!
So,what is Hopey/Changey’s gafferecord!
Has he pissed off,almost every country on
the planet!
Its going to take the Republican Party,once
they eventually get in power,many years,to
undo all of this Liberal damage that Obama
has done!!
canopfor on May 8, 2009 at 8:15 AM
Bean counting magic trumps research every single time.
Limerick on May 8, 2009 at 8:16 AM
It seems that only us “extremists” do the research that the media refuses to do.
Les in NC on May 8, 2009 at 8:19 AM
No.
ladyingray on May 8, 2009 at 8:20 AM
Research? We don’t need no steenkin’ research! Dear Leader is speaking about a higher truth. One that is unencumbered by reality.
rbj on May 8, 2009 at 8:21 AM
The thing that absolutely amazes me is how he can essentially start an argument for a lower corporate tax rate to make us more attractive to businesses, but then end up on the complete opposite end side of the coin.
There is no additional data or evidence that took him there. He just put on his blinders and slogged forward, completely dismissing what he himself just said.
Bush’s rhetorical fumbles were largely grammatical in nature. President Obama’s are almost always in the logic.
BadgerHawk on May 8, 2009 at 8:22 AM
Yes. Opposition research.
Loxodonta on May 8, 2009 at 8:25 AM
The left is still enamored with The Infallible One, and the center is in a state of post-election numbness where they’re content to let pretty much anything slide until the bill comes due (either in treasure or in blood). Richard Clarke told the 911 Commission that Americans need more body bags before they take action, and that same mentality is true on budgets/taxes…they need more bills before they get pissed. What’s remarkable is that those bills are now definitely going to come due, and the ONLY thing that can save the Dems from the backlash of that is a massive economic boom-not just a recovery, but a boom.
scottm on May 8, 2009 at 8:27 AM
This Administration is not interested in logic, fact or consistency. It’s all about undoing the criminal past of this nation and rewarding the downtrodden through the aggressive redistribution of wealth.
Hope and Change, baby!
cruadin on May 8, 2009 at 8:30 AM
I think we might have an OOTW winner here.
Red Cloud on May 8, 2009 at 8:37 AM
ROTFLMAO…. Oh the dems are going to get a boom alright, it just isnt going to be a financial boom…..
doriangrey on May 8, 2009 at 8:45 AM
Granted he is the first man of African descent as President. But do we also get credit for the first
retardedmentally handicapped President.darktood on May 8, 2009 at 8:46 AM
because i am a near/mid/far eastern/asian neophyte, i wonder if saying negative things about India is a positive.
they are sitting over right next to pakistan where the pakistani nukes were pointed right at them. no one seems to know where the nukes are now & where they are pointed so isn’t it not so good to agitate an ally in the area that we might need?
am i clueless?
kelley in virginia on May 8, 2009 at 8:50 AM
You know the old saying, “it’s really hard work covering up lies once told.”
Keemo on May 8, 2009 at 8:51 AM
Obama’s staff does research the same way Tibetan monks do research: They ask The Holy One what’s true, and He tells them.
logis on May 8, 2009 at 8:52 AM
Has the MSM actually busted Obama on any of these gaffes? It’s no wonder why they want to silence free speech so badly.
Keemo on May 8, 2009 at 8:53 AM
Obama’s point: Taxes paid to the US government by a US corporation are lower if they outsource jobs to India.
WSJ/Ed’s completely irrelevant point: India has a high tax rate.
Ed, maybe you ought to stick to the petty stupid crap like “Obama ordered the wrong mustard.”
e-pirate on May 8, 2009 at 8:54 AM
Hey, the deus ex acorn doesn’t need actual facts to make his case. If he says it, it’s true, dontcha know?
mr.blacksheep on May 8, 2009 at 8:56 AM
Yup, about sums you up….
doriangrey on May 8, 2009 at 8:58 AM
By what mechanism are the taxes lower? Isn’t their taxable income higher if they lower their costs and thus make higher profits? Are you confusing tax and direct cost?
And you have to understand how a lot of companies do the outsourcing: They set up subsidiaries in India (ie. taxable entities) to employ the people over there.
mr.blacksheep on May 8, 2009 at 8:59 AM
The administration’s rebuttal to all fact checks: “You knew what he meant.”
amkun on May 8, 2009 at 9:00 AM
No. You are not clueless.
We will convey our deep appreciation for the Islamic faith, which has done so much over the centuries to shape the world, including in my own country.
– President Obama
But Hindus are fair game.
Loxodonta on May 8, 2009 at 9:01 AM
e-pirate on May 8, 2009 at 8:54 AM
Irrelevant to the central argument about tax rates?
The best response may be a paraphrase of Jim Carrey in “Liar, Liar.” Why is it irrelevant? “Because it’s devestating to Obama’s case.”
cs89 on May 8, 2009 at 9:02 AM
But they don’t pay an effective tax rate of 55%, not even close.
My company is setting up a factory in a 10 year tax free special economic zone, for example.
My point was saying “Aha, India’s tax rate is 55%!” is a red herring.
e-pirate on May 8, 2009 at 9:03 AM
Which you think would be the first sentence in an argument to lower the corporate tax rate here in the US, yes?
But he somehow pole vaults to the complete opposite conclusion without any supporting evidence.
BadgerHawk on May 8, 2009 at 9:06 AM
Why does everything with President Obama have to be about punishing people until they do what he wants?
-Ship your job overseas? Higher taxes!
-Bondholders don’t feel like being robber to pay the UAW? Public demonization!
-Banks want to pay back some TARP funds early? It’ll cost ya`.
It’s not very empathetic of him.
BadgerHawk on May 8, 2009 at 9:09 AM
What Obama is going to do is raise taxes $200 billion on corporations with no reduction anywhere else. How is this going to discourage businesses from locating elsewhere? In fact, it will give incentive to leave the US entirely so that they no longer have to pay any taxes on overseas earnings since most countries do not tax overseas profits.
Eliminating tax breaks in order to lower tax rates overall on corporations makes sense any time. Just raising corporate taxes during a recession when other countries are lowering corporate taxes makes no sense at all.
KW64 on May 8, 2009 at 9:10 AM
So, let’s see. There’s a corporation, headquartered in the US, that expands to another country. It creates a job in that other country and pays taxes in that country based upon business in that country. Yet it should also pay tax in the US based upon the business created in that other country? How does that make sense?
If you want companies to create economic activity in the US, have a tax code that encourages economic activity creation in the US, not one that punishes economic activity creation in another country. Is that so hard to understand?
rbj on May 8, 2009 at 9:18 AM
Anyone wish Obama had hired Spitzer?
Dream Team
It’s Elizabeth Warren and Eliot Spitzer. Or, if you prefer, Eliot Spitzer and Elizabeth Warren. I can’t decide who gets top billing.
Watch my interviews with them from Thursday and see why I wish they were running things.
Upstater85 on May 8, 2009 at 9:19 AM
Give him a break , he only got good intentions , he’s paving the road to hell with them..
the_nile on May 8, 2009 at 9:23 AM
India is a big ‘ol high-pressure melting pot of various religions. Worldwide, Hinduism has 837 million followers. So if Obama only annoyed THEM, that’d be good. Because India has 1.2 BILLION people.
But hey, I’m sure nobody in India heard what Obama said…
hawksruleva on May 8, 2009 at 9:33 AM
The taxes they pay in India are higher than the taxes they would pay here. That’s the point that Obama and e-pirate miss. The reason they relocate to India is not because India is a tax haven, as Obama suggested, but because labor costs are much cheaper.
Ed Morrissey on May 8, 2009 at 9:50 AM
From what I’ve heard, the US companies don’t pay any tax to the US for their foreign based operations. So Dell, for instance, would pay only the 55% tax to the Indian government and none to the US. Obama wants to force them to pay US tax as well. So foreign based operations of US companies will be double taxed, putting them at a severe disadvantage to their world competitors.
alteredbeat on May 8, 2009 at 10:04 AM
What an odd way of putting this. “We have a tax code that says…” Isn’t it a simple case of creating the job where the taxes are lower? Maybe I’m missing something in this argument.
As I watched him speak on this, I tried to imagine how he might seem to someone who knows little about the issue. What I realized is that anyone who doesn’t know the context, and/or is not familiar with the topic, would wonder why anyone would object to what he was saying. He seems so confident, so reasonable. I imagine many of his supporters are people who are susceptible to his efforts to mislead, because they don’t know enough to be skeptical.
Dee2008 on May 8, 2009 at 10:18 AM
Taxes not paid elsewhere result in taxable income here in the US, even if the profits are not brought back in cash. How? Well, a US company retaining profits in a foreign subsidiary, even (or especially) one with lower taxes, will have its share price increase as an obvious consequence of the fact that it is showing higher returns on invested capital. Who owns those shares, maybe Americans? Who pays taxes on the dividends or capital gains? Americans again?
You have to remember that there really is no such thing as a tax that corporations pay: ultimately it is either the corporation’s shareholders or its customers who pay the tax.
So, it could be argued that it in fact benefits US tax receipts for companies to set up subsidiaries in lower tax domains. But this is inconsequential to what I took to be Ed’s argument.
The point of the original post is that it is foolish to use outsourcing to India as an example of a way to escape taxes. I do recommend reading the original article, linked here for your convenience, to understand why that is the case.
mr.blacksheep on May 8, 2009 at 10:21 AM
Chump in Chief
Y-not on May 8, 2009 at 10:28 AM
His example are textbook immature liberal teenager thought.
geckomon on May 8, 2009 at 10:33 AM
If it’s not on the Huffington Post or Daily Kos then the admin has no clue as to what is going on.
Brat4life on May 8, 2009 at 10:36 AM
Well, you know, Obama gets most of his information from radical Left wing blogs like DailKos and Andrew Sullivan (even though he claims he doesn’t read blogs).
OxyCon on May 8, 2009 at 10:52 AM
Ed,
The picture for Obamateurisms needs to be fixed: the ears are not large enough.
Right_of_Attila on May 8, 2009 at 10:56 AM
So we’ll all shuffle outta Buffalo when BuffalObama raises taxes to 55% there. After all, the American gubmint can’t be poorer than the Indian gubmint!
Steve Z on May 8, 2009 at 11:48 AM
Anyone wish Obama had hired Spitzer?
Dream Team
It’s Elizabeth Warren and Eliot Spitzer. Or, if you prefer, Eliot Spitzer and Elizabeth Warren. I can’t decide who gets top billing.
Watch my interviews with them from Thursday and see why I wish they were running things.
Upstater85 on May 8, 2009 at 9:19 AM
You mean Eliot Spitzer and Ashley Dupree?
Steve Z on May 8, 2009 at 11:49 AM
So India has a lot of unemployed educated people who need jobs who don’t need a lot of money to substain themselves. They entice our companies to employ them, give them job training and India is much better off than they would be otherswise. Wonder how far into the future if Obama follows his mentors and the path of his comrade, Chevaz, before we will be wishing we could do that.
Franklyn on May 8, 2009 at 12:32 PM
It doesn’t matter to Obama, his administration, or his supporters, if research, or facts are laid out. If demonizing a country, an idea, a fact, or people….he’ll do it. It furthers his agenda, and that’s all that matters…..to him!
capejasmine on May 8, 2009 at 12:57 PM
Opposition research. They’re real good at that.
Greg Toombs on May 8, 2009 at 1:28 PM
It’s not usually my style to accuse a politician of racism, but that’s what Obama’s statement was. He played off the ever present stereotype of the “outsourced to India” punchline that has been a staple of comedians and talk show hosts for years now.
If Republicans can be accused of racism for pointing out racial but factual examples of runaway immigration, we can certainly accuse Uh-uh-uh-bama of racism for invoking a racial boogeyman.
ynot4tony2 on May 8, 2009 at 2:10 PM
Don’t think the unions will allow him to point that out.
cs89 on May 8, 2009 at 3:08 PM
They have deployed all their research staff on Joe the Plumber, Gov Palin and Miss california. They will have to create jobs and add some research staff. Until then, whaver comes from the mouth of the One is named as being absolute truth.
I guess we can charge India with misrepresenting it’s taxation.
seven on May 8, 2009 at 4:23 PM