Why Should Americans Promote Foreign Job Creation?

U.S. multinational corporations play an invaluable role in the American economy. They are research and export intensive, and they provide tens of millions of high-paying jobs. Their worldwide distribution networks increase demand for domestic research, high-tech manufacturing, and management services. It is not in the interest of the United States to have multinationals' headquarters go abroad or for them to be at a competitive disadvantage to foreign-headquartered multinationals. We should always remain vigilant to problems, but as of now there is little evidence U.S. multinationals are going abroad and there is little evidence that U.S. multinationals suffer significant tax disadvantages vis-à-vis foreign headquartered multinationals.

Moreover, multinational corporations are only a part of the American economy. Multinational competitiveness is not an end unto itself. The competitiveness of the entire economy is what is critical to the standard-of-living of the American people. If job creation through tax reform is our goal, we cannot neglect small business. We cannot neglect large and mid-sized business that do not have foreign operations but nevertheless compete internationally (with their exports on foreign markets and with imports into the United States). We cannot close the door to highly mobile job-creating foreign companies that clearly have opportunity to locate their factories elsewhere.

Too often in Washington D.C. the term "competitiveness" is equated to the "competitiveness of multinationals." This is a serious mistake. A far more important objective is promoting the overall competitiveness of the U.S. economy...

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