In his weekly address this past weekend, President Obama spoke specifically about corporate taxes on manufacturing and on outsourcing jobs, echoing his words from his State of the Union address last month:

No company should get a tax break for outsourcing jobs. Instead, tax breaks should go to manufacturers who set up shop here at home. Bigger tax breaks should go to high-tech manufacturers who create the jobs of the future. And if you relocate your company to a struggling community, you should get help financing that new plant, that new equipment, or training for new workers. It’s time to stop rewarding businesses that ship jobs overseas, and start rewarding businesses that create jobs here in America. And Congress should send me that kind of tax reform right away.

What President Obama calls a “tax break for outsourcing” is really no tax break at all. America has the highest corporate tax in the world. America’s corporate tax rate is nearly three times that of  the financially flailing  Greece. Companies are not given a tax credit or subsidy specifically for outsourcing, but by outsourcing, their costs become lower as often the regulatory burden is smaller as are other costs.  Additionally, American companies who have foreign subsidiaries pay taxes both to that foreign country and the US, and these companies pay taxes if those profits are repatriated.

As the Cato Institute notes “corporate income taxes are the most distortive, and hence the most harmful for economic growth.” Making America’s corporate tax rates competitive with the rest of the world will help drive jobs back to America, but the Obama administration has it backwards by suggesting the corporate tax reduction should follow companies “insourcing” jobs. Even in spite of the fact that President Obama’s deficit reduction commission proposed corporate tax reductions and that he himself discussed reductions in his 2011 State of the Union address, he has not made any concerted effort to reduce the corporate tax. In fact, his administration has even recently spoken of levying a “global minimum tax” to prevent American companies from “escaping doing their fair share” by outsourcing.

One only needs to look to President Obama’s home state of Illinois to find how dead wrong President Obama is on this issue.

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“Stop the bad stuff” is what John Boehner told a bunch of us at breakfast a few weeks before the election. That’s how he defined the GOP mission. Now he’s Speaker.

And now there’s an opportunity for both ends of Pennsylvania Avenue to move in the direction of a supply-side economic growth model to reduce chronic unemployment and really get the economy moving again.

You can’t govern from the House alone. Boehner knows that. But he also knows that you can stop the redistribution, the big spending, the overregulation, the tax hikes, and the war against business and investors.

The economy is picking up this new political vibe. Economic growth has shifted to 4 percent from 2 percent (even though the Fed hardly acknowledges this). And just in the last six weeks, indicators of better jobs and business confidence have been springing up everywhere.

The economic upturn probably started late last summer, but it has picked up steam since the elections. Car sales, ISMs, small-business confidence, and brisk holiday retail sales — the indicators all look good.

And what’s helping light things up? Low-tax-rate clarity. Stopping the pork-barrel, earmarked, omnibus spending bill. And now the potential undermining of Obamacare. Plus, the hope for broad-based spending limits, and even a corporate tax cut touted by Obama and hopefully the new House Republicans. Trust but verify. And right now I’m willing to trust.

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From the Associated Press:

One of the first places to test the new pro-business push will be Wisconsin, where Republican Gov.-elect Scott Walker has promised to call the new GOP-led Legislature into an emergency session on his first day in office Jan. 3.

Walker wants to lower taxes on businesses with fewer than 50 employees, impose new business-friendly limits on liability lawsuits and transform the state Commerce Department into a public-private partnership to lure companies to the state.

“I think it’s basically put-up-or-shut-up time,” Walker said after his November election. “We have a mandate from the voters of the state, and it’s one we don’t take lightly.”

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This week, President Obama held a summit in Washington, D.C., with top CEOs to discuss a variety of economic topics.  Among them was U.S. competitiveness in the global economy, with Obama describing the issue upfront as an “overarching theme,” and with the message being sent that competitiveness impacts domestic job creation.

Obama’s comments were timely, because on Tuesday, it emerged that Japan, which currently maintains the highest corporate tax rate of any O.E.C.D. (i.e., developed) nation, will cut its corporate income tax by “5 percentage points in a bid to shore up its sluggish economy,” according to the New York Times.

Currently, Japan’s corporate tax rate is about 40 percent, slightly higher than but roughly the same rate as the U.S. rate.

However, Japanese leaders aim to cut the tax rate in order to make the country more competitive, internationally, provoke new investment and boost job creation.  Japan is worried about its unemployment rate of 5.1 percent–a figure of envy to most in Europe and the U.S., where unemployment is running substantially higher.

The fact that Japan’s corporate tax rate, post-cut, will remain higher than that of South Korea (24 percent) or Germany (29 percent) however has some figures skeptical as to whether the plan will work.  In addition, Japan may raise its consumption tax rate to offset the cut, which could minimize positive effects that would otherwise flow from it.

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