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		Home Page News You Can Use Democrats Can't Get Firm Grip on Jobs Issue Part two   At first blush, DaimlerChrysler's decision looked easy. Wages in Mexico are as little as one-fifth the $18 an hour that employees in the Milwaukee plant's largest union are paid. But a closer look shows the complexity of the issue. The cavernous Milwaukee plant was built in 1910, sprawls over 149 acres and has 3.1 million square feet under one roof, of which only 1.1 million are in use, said Bev Pierce, a Tower spokeswoman. "That certainly affects the cost structure there," she said. Tower Automotive won the contract to build the frame for Chrysler's redesigned Dodge Dakota sport-utility vehicle at its relatively small, 294,000 square-foot plant in Plymouth, Mich., which was built in 1996. That is proof that low-wage countries do not necessarily have the edge, said DaimlerChrysler spokesman Michael Aberlich. "They were the best," he said of the Plymouth plant, "and that's what it's all about." The tax code does offer some advantages for overseas expansion, tax experts say. A company can deduct from its taxes the interest paid on loans for any new plant. If that plant is built in the United States, its profits are taxed immediately. If it is built overseas, profits are taxed once they are brought home, and if they are reinvested abroad, they may never be taxed, an Edwards economic aide said. Gary C. Hufbauer, an international tax expert at the Institute for International Economics, noted that when a U.S. subsidiary operating in China pays royalties to the parent company for technology developed in the United States, it gets U.S. tax credits to offset royalty taxes imposed by China. By inflating royalty payments to itself, a company can use its foreign operations to reduce its U.S. taxes. "The tax code does favor international expansion," Hufbauer said. Kerry and Edwards have embraced pending congressional legislation to create a lower tax bracket for domestic manufacturing operations. Kerry would give employers tax credits to offset payroll taxes for new hires. Edwards would renew tax incentives for business investment in impoverished areas, but target them at regions hit hardest by international job losses. Both candidates have promised programs to finance alternative energy development and to lower the cost of employer-sponsored health care, programs they say would make U.S.-based industries more internationally competitive. Kerry has also said government contracts, when possible, should go to U.S.-based businesses, and that call-center phone operators should at least be required to identify what country they are in. He has called for a government study into outsourcing, its scope and costs, and has backed a law requiring companies to keep records of what jobs were sent abroad and why. "Outsourcing is a new phenomenon," a Kerry aide said. "We don't really have a clue what's going on." Roger C. Altman, chairman of the Wall Street investment firm Evercore and a Kerry economic adviser, said some jobs for which the wage differences are vast will not be saved. But, he said, an integrated response focused on taxes and lowering business costs will save "certain jobs that are susceptible to a competitive response."   Back to Original Article: News You Can Use   Continue with: Japan and Iran Sign Major Oil Deal Bush Economic Team Under Fire Over Jobs Bush Economic Team Under Fire Over Jobs Part twoD 3 European Leaders Agree on Economic Plan Jobless Claims Drop, But Labor Still Soft Jobless Claims Drop, But Labor Still Soft Part Two Stocks Set to Climb After Solid Earnings Euro Attempts Small Rebound on Dollar Euro Attempts Small Rebound on Dollar Part two Jobless Claims in U.S. Decline to 344,000, More Than Economists' Forecasts One step closer to hydrogen economy? The escaping price of natural gas Stock funds swell by $60 billion
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