How to Destroy American Jobs

Slaughter, M. J. (2010) How to destroy american jobs. Retrieved from http://online.wsj.com/article/SB20001424052748704022804575041253835415076.html?mod=vocus#printMode

This article, found on WSJ.com, discusses one aspect of President Obama’s proposed budget released on February 1, 2010. The section discussed is headed "Reform U.S. International Tax System" and if enacted, U.S.-based multinational firms will face $122.2 billion in tax increases over the next decade. The intent of this tax proposal is keep U.S. companies from expanding in other countries and thereby producing more jobs domestically. However, studies have shown that the opposite would happen and that these tax increases would actually destroy American jobs. The article refers to research done by Mihir Desai, Fritz Foley, and James Hines, which concluded that when multinational U.S.-based firms expand internationally, it is not at the expense of domestic jobs at the parent company, but is strongly associated with more investment and employment in the domestic operations. Their study is titled "Foreign Direct Investment and Domestic Economic Activity" and can be found at http://www.nber.org.ezproxy.waterfield.murraystate.edu/papers/w11717.pdf. This is an example of well-intentioned actions proposed by the government but if the studies are accurate, the intented results will go amiss, so this and other proposals need to be given an extensive amount of consideration before enacted.