Conservative group says Democrats’ inversion plans would cost US jobs

Democratic proposals aimed at companies reincorporating abroad for tax purposes could cost the U.S. tens of thousands of jobs, according to a new report from a conservative group.

{mosads}The American Action Forum says that legislative measures to curb inversions could cost 42,000 jobs, by giving companies even more incentive to move their headquarters out of the U.S.

Democrats have pounded the issue of so-called corporate inversions for months, calling companies that move abroad while making few changes to their business unpatriotic.

President Obama has even labeled those companies “corporate deserters,” while Burger King’s decision last week to merge with the Canadian doughnut chain Tim Hortons brought even more attention to the issue.

A gridlocked Congress is unlikely to pass anti-inversion legislation. But Democrats are pushing to essentially still count U.S. companies that buy smaller foreign competitors as American for tax purposes.

Republicans and groups leaning to the right, like the American Action Forum, say the real culprit is the U.S.’s high corporate tax rate.

In its paper, the American Action Forum notes that the effective corporate tax rate is high compared to foreign competitors.

Democratic proposals to count a company seeking to move offshore as American for tax purposes if it does significant business and is primarily managed here would give companies incentives to eventually move their headquarters abroad as well, the group argues.

The American Action Forum added that the biggest U.S. companies employ around 299,000 people at their headquarters. The group speculates that around 15 percent of the capital and jobs at those companies – or roughly 42,000 jobs – would be at risk under the Democratic proposals.