Obama Visits CNSE, Calls for Tax Changes
President Barack Obama said the corporate tax code needs to be revised to reverse the tide of outsourcing to countries which have lower corporate tax rates.
President Barack Obama, during a visit to CNSE in Albany, N.Y. (Source: GlobalFoundries)
“After years of undercutting the competition, now it’s getting more expensive to do business in places like China. Wages are going up. Shipping costs are going up. And meanwhile, American workers are getting more and more efficient. Companies located here are becoming more and more competitive,” Obama said during a visit to the College of Nanoscale Engineering and Technology in Albany, N.Y. Tuesday (May 8).
Noting that GlobalFoundries and others are hiring in New York because of the quality of the workforce, Obama said more companies are insourcing, citing an unnamed study that found that half of America’s largest companies are thinking of moving their manufacturing operations from China back to the United States.
“Even when we can’t make things cheaper than other countries because of their wage rates, we can always make them better,” Obama said.
However, to keep up the momentum behind the resurgence in manufacturing, Washington needs to revise the corporate tax code, the president said, arguing that companies now get tax breaks for moving factories, jobs and profits overseas. “They can actually end up saving on their tax bill when they make the move. Meanwhile, companies that choose to stay here are getting hit with one of the highest tax rates in the world. That doesn’t make sense,” Obama said.
Long term, Congress needs to implement a full-blown tax reform. But nearer term, the president said “at the very least what we can do right away is stop rewarding companies who ship jobs overseas and use that money to cover moving expenses for companies that are moving jobs back here to America.”
GlobalFoundries CEO Ajit Manocha addressed the crowd of over 500 people at the CNSE complex and lauded the Obama administration’s Advanced Manufacturing Partnership and its support for the America Invents Act. “American manufacturing is climbing back, with almost half a million jobs added in the manufacturing sector since 2010,” Manocha said.
Public-private partnerships have created jobs in New York, he said, noting that the GlobalFoundries Fab 8, north of Albany, will create more than 1,600 new direct jobs and approximately 8,000 additional new indirect jobs, representing an annual payroll of over $300 million. Fab 8 consists of almost two million square feet of total space, built with an estimated capital budget of approximately $6.9 billion. The fab will ramp to volume production in late 2012, Manocha said. Upon full build out, it will have a production capacity of approximately 60,000 wafers per month.
Tags: CNSE, College of Nanoscale Science and Engineering, GlobalFoundries