The Obama Administration proposes to increase the costs of doing business abroad for US multinationals "...finally ending the tax breaks for corporations that ship our jobs overseas."
Do US firms that invest and do business abroad take jobs away from Americans? Should we tax them harder, or impose other onerous burdens on them to make them produce here?
Mihir Desai and his co-authors say think twice. In a new article in the new journal Economic Policy ("Domestic Effects of the Foreign Activities of US Multinationals"), they look at actual behavior by U.S. multinational companies between 1982 and 2004. They find that firms investing more abroad tend to invest more at home, firms that pay foreign employees more tend to pay more at home: