"A Tax Attack on America's Top Companies" by Jim Powell (Cato Institute: Commentary)

"A Tax Attack on America's Top Companies" by Jim Powell (Cato Institute: Commentary): "In the event Obama were able to impose such double taxation on the offshore operations of U.S.-based multinationals, the consequences could be devastating. U.S.-based business could be wiped out around the world because of the difficulty of competing with offshore-based rivals that have to pay taxes only to the (probably lower-tax) country where they have operations. Taxes are just another cost of doing business, and if they make the total cost of doing business excessively high, a company is bound to lose market share and ultimately withdraw from a market. Large numbers of U.S. jobs are related to business being conducted overseas, so if overseas business contracts, jobs are going to be lost here in America."

"Another possibility is that Obama's double taxation triggers an exodus of U.S.-based multinationals that re-incorporate offshore. We have seen how, during the past several decades, high New York City taxes played a major role in the dramatic exodus of Fortune 500 headquarters to lower-tax states. More recently, we have seen how California's high taxes have stimulated an exodus of companies from that state, contributing to high-tech "clusters" elsewhere in the country.

Consider how double taxation would affect incentives facing U.S.-based multinationals that make more money abroad than they do in the U.S: General Motors, for example. Why would GM endure double taxation on its profitable overseas operations for the sake of its unprofitable U.S. operation? If Obama had his way with double taxation, we might wake up suddenly to find that GM had become a Swiss-based corporation that walked away from its U.S. operation, leaving it in the hands of the UAW and the U.S. Treasury (or maybe the post office). There could be many defections from the Fortune 500 list."