Ahead of a speech to be given in Warren, Democratic nominee Joe Biden early Wednesday unveiled a plan to tax companies that move work overseas at a higher rate and reward those that bring jobs back into the U.S.
In any other campaign, it would be one direct from the Democratic playbook, but given that President Donald Trump has made the same claims a central part of his presidency, it comes as a frontal assault on Trump’s economic record in a state the president won by just two-tenths of 1% four years ago.
Biden, the former vice president, was set to meet later in the day with UAW members and hold a closed-but-livestreamed campaign event in Warren a day ahead of a campaign rally in Freeland to be held by Trump.
In a release put out by the campaign, Biden sharply criticized Trump’s handling of the economy even before a steep slide caused by the coronavirus pandemic, pointing to reports that manufacturing had entered a recession even before then and that a 2017 tax bill encouraged companies to move jobs overseas.
If elected, Biden said he would:
- Push for legislation that would increase the top corporate tax rate from 21% to 28% and implement an additional surcharge on any production moved out of the U.S. on goods and services to be sold or provided back into the U.S. That would bring the rate on profits from those activities to 30.8%.
- Ask Congress to approve a 10% “Made in America” tax credit to companies making investments that would create or relocate jobs inside the U.S., allowing them to use the credit in advance of the actual job creation as long as it is used on activities such as reopening closed plants or investing in new equipment that leads to the jobs.
- Sign executive orders during his first week in office that would strengthen so-called Buy American provisions that encourage the purchase of American-produced goods and services in public contracts and require more transparency as to where goods and services are ultimately originating.
Throughout his 2016 campaign and four years of his presidency, Trump has made a key component of his agenda returning jobs from overseas, especially manufacturing jobs, saying he would target companies, including automakers, who moved U.S. production out of the country.
While he can point to successes doing so in the first years of his term, there was evidence that the economy was slowing even before the coronavirus hit, and Biden noted reports saying that more jobs were returned from overseas in 2016, the last year of President Barack Obama’s second term, than were returned in 2019.Get the Elections newsletter in your inbox.
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The Free Press reported last week that while manufacturing in Michigan had seen some gains before the pandemic hit, they were far less than those seen during Obama’s second term and that auto and auto parts manufacturing jobs had actually declined while the average amount of U.S. content in vehicles sold by the three Detroit-based automakers had declined.
Trump also never followed through with threats during the campaign and his presidency to unilaterally impose tariffs on U.S. auto production and other manufacturing moved out of the U.S., though he did place tariffs on certain goods and those from certain countries, including China. There has been some evidence, however, that those actions hurt the economy.
“President Trump chooses multinational corporate interests over American workers again and again,” the Biden campaign said in its release, repeating Democratic claims that the 2017 tax cuts, while including breaks for most taxpayers, were skewed toward helping corporations and the wealthy. “He promised a major infrastructure plan and policies to end outsourcing and bring jobs back to the United States. Instead, he created a tax loophole that actually rewards companies for shipping jobs and profits overseas.”
“President Trump talks and talks — but he has failed to deliver results for American workers,” the statement said.
Trump, however, clearly can point to a stock market that saw significant gains — albeit among volatile activity — during his term comparable with what was seen during Obama’s second term and to job creation in manufacturing and other sectors, especially during his first two years.
The president is also coming off strong economic gains being reported late last week with some 1.4 million jobs being added in August as the nation continued its return from the height of the pandemic slowdown, though the overall number of jobs remains well below its pre-COVID-19 highs. The unemployment rate nationally fell from 10.2% in July to 8.4% in August, but that compares to a rate of 3.7% in August 2019.
Despite Biden’s criticism, there have also been questions about whether the 2017 tax law encourages offshoring of jobs to the degree he and the Democrats suggest, with conservative supporters arguing it actually encouraged companies to return investment to the U.S. by lowering the tax rate on those profits, rather than charging more than most other industrialized countries.
Biden’s plan, meanwhile, still lacks several details to be made public, such as how the job creation tax credit would be enforced and if companies would be forced to repay credits that were given but didn’t result in the number of jobs promised. A release on the proposal also suggested it would be strongly linked to manufacturing jobs and closed plants, as well as occupaions suchcall service centers — though it was unclear whether it would apply to any job being moved from overseas.