Cuba's best known political blogger and frequent FP contributor Yoani Sanchez was arrested today after traveling to Eastern Cuba. Reuters reports:
Sanchez, and husband Reinaldo Escobar, were said to have
been detained on Thursday in Bayamo, where officials feared they
were going to provoke a "media show" around the trial, according
to the reports.[...]
She, her husband and other dissidents apparently were on
their way to Bayamo for the trial of Spaniard Angel Carromero,
who is charged with two counts of vehicular manslaughter for the
July 22 death of prominent dissident Oswaldo Paya and his
colleague Harold Cepero.
Sanchez was tweeting from the road yesterday and reported being stopped several times by police to fumigate the car for mosquitoes.
Earlier this year, she was denied permission by authorities to travel abroad -- the 19th time she had been turned down. Sanchez wrote late last year about how the government's unease in the wake of the Arab Spring had made life more difficult for journalists on the island.
It was one of the most heated and perplexing moments in the presidential debate last night. Barack Obama pledged to "close those loopholes that are giving incentives
for companies that are shipping jobs overseas" and instead "provide tax breaks for
companies that are investing here in the United States." As things stand, he added, "you can actually take a
deduction for moving a plant overseas. I think most Americans would say that
doesn't make sense. And all that raises revenue."
Romney expressed bewilderment. "You said you get a deduction for taking a plant overseas," he noted. "Look, I've been in
business for 25 years. I have no idea what you're talking about. I maybe need
to get a new accountant."
So what's going on here? It turns out that both candidates, in a sense, had it right. There's no specific tax break for moving jobs or a plant abroad, but companies can deduct the expenses associated with doing so as part of the cost of doing business.
"To be perfectly blunt [Obama's] proposal is for show only," Eric Toder,
co-director of the Washington, D.C.-based Tax Policy Center, told Foreign Policy.
While many companies invest overseas, he explained, "there are not a
lot of companies that take plants and literally ship them overseas."
"Who knows," he added, "maybe [Romney's] businesses never did ship a
For some time now, however, Obama has been running on the promise to end tax breaks for companies that ship jobs overseas. He made it a central theme of his 2008 campaign, and even raised the issue during a debate while running for the Senate in 2004:
But Obama's talk of "loopholes" and "incentives"
for companies to send jobs abroad is pretty misleading. As the Washington Post's Glenn Kessler notes today, it's true that companies can deduct the expenses associated with moving their operations overseas, but they can do so because "ordinary and necessary" business expenses -- including closing a plant in the United States and opening one in another country -- are tax deductible. Or, as Fox News put it, "a company can
claim the deduction whether it's moving operations to Bangalore or Boston, to
Kuala Lumpur or Kansas City."
In other words, it's not like the U.S. government is encouraging corporations to
relocate plants overseas through specific tax credits or sleight of
hand in the tax code. Instead, Obama wants to add incentives and disincentives to the tax code by preventing companies from deducting the costs of moving their operations overseas as part of their ordinary business expenses. Kessler also points out that, according to the nonpartisan Joint Committee on Taxation, taking such action would only raise $168 million in revenue over a decade -- a paltry sum relative to the country's $1 trillion annual budget deficits.
The Obama administration would go a step further by offering companies a 20-percent tax credit for the costs they incur in moving operations back to the United States, in an effort to incentivize "insourcing." Senate Republicans blocked a Democrat-led bill -- the Bring Jobs Home Act -- that included these very proposals. "Unfortunately, there's a constituency in Congress that supports tax breaks for companies that ship jobs overseas," White House Press Secretary Jay Carney lamented shortly before the legislation died, in response to a question about why, three-and-a-half years after Obama's election, the president hadn't made good on his campaign promise.
In January, shortly after Obama's State of the Union address, the White House released a fact sheet that offered a clearer explanation of what the president meant by his overseas jobs sound bite:
company was closing a plant to move that plant overseas and incurred $1 million
in expenses - ranging from the cost of scrapping equipment to shipping physical
capital to clean up costs - it could right now deduct those expenses, and get a
tax reduction of $350,000 (assuming the firm faces the 35 percent statutory tax
rate). The President proposes to eliminate this tax deduction. And,
if a corporation moving jobs to the U.S. incurred similar expenses, the
President proposes to provide that company with a tax credit of $200,000 to
help offset these costs and encourage investment here at home.
That's a point the administration can make without clouding the issue by invoking phantom "loopholes" and "incentives." Or, as Senator Orrin Hatch (R-UT) put it after waiving a copy of the U.S. tax code on the House floor in July:
"I'll keep this book of tax codes
at my desk here. If someone wants to show me the tax code that allows
deductions for shipping jobs overseas. I'd like to see it. But it's not in
For those who are wondering: As far as I can tell, Orrin Hatch is not Mitt Romney's accountant.