Sen. Sherrod Brown, D-Ohio, is making a lot of political hay over General Motors’ decision to close a plant in Lordstown, Ohio (they have also announced they are expanding operations in Mexico). The senator is dusting off the old “shipping jobs overseas” playbook that Democrats have used for the past decade, but he’s got a problem in doing so: The Tax Cuts and Jobs Act already solved the very issue he’s complaining about.
Prior to the passage of last year’s landmark tax reform law, the international aspects of the U.S. tax code were a mess. If a company made a profit and created jobs here, they owed a 35 percent corporate income tax rate—a rate which, when combined with state corporate tax rates, was the highest in the developed world. By contrast, if that same company made a profit and created jobs overseas, they owed precisely nothing to the United States—a 0 percent tax rate. Provided they kept their money offshore, companies could avoid paying any tax to the IRS on these profits indefinitely, theoretically forever.
