July 16 (Bloomberg) -- President Barack Obama stepped up his attack on Mitt Romney’s tax and economic plans, accusing the Republican presidential candidate of advocating policies that would create more jobs overseas than in the U.S.
Campaigning in an area of southwestern Ohio long dominated by Republicans, Obama hit Romney on taxes and his background as head of the private-equity firm Bain Capital LLC as he sought to hold on to support in the Midwestern swing state.
“We don’t need a president who wants to ship more jobs overseas,” Obama today told about 1,200 supporters at a campaign forum at the Cincinnati Music Hall.
Obama is spending four days this week campaigning and raising money as he faces what polls show is a close race for election in November. Ohio, with 18 electoral votes, has been a bellwether in modern presidential politics, voting for the winner in every election since 1964. No Republican has won the presidency without also winning the state.
Obama and his surrogates spent last week questioning Romney’s veracity when 2002 Securities and Exchange Commission records surfaced that listed him as Bain’s chief executive officer -- three years after he said he had quit running the company and during a period when the firm fired workers and outsourced jobs overseas.
Romney today said he was “very proud” of his business record, charging the president with trying to distract from economic issues.
“I’d say to the president, ‘Wouldn’t it be interesting, Mr. President, wouldn’t it be interesting if you spent some time speaking about your record?’” he said in an interview on Fox News.
Obama today focused in on differences in tax policy, including how corporations are taxed on earnings outside the U.S. Citing an analysis today by economist Kimberly Clausing in the publication Tax Notes, Obama said Romney’s call for a so-called territorial system of taxes for multinational corporations would create 800,000 jobs.
“There’s only one problem,” Obama said. “The jobs wouldn’t be in America. They’d be in other countries.”
Under current tax law, U.S.-based companies owe U.S. taxes based on the income they earn around the world. They can get tax credits for payments to foreign governments and defer that residual U.S. tax until they bring the money home.
Since the 2008 campaign, Obama has been proposing changes that would make it harder for companies to defer the U.S. taxes, arguing that the current system provides incentives for companies to shift profits and jobs out of the U.S. His most significant proposals haven’t become law.
Romney wants the U.S. to follow the examples set by the U.K. and Japan and switch to what’s known as a territorial tax system, which doesn’t attempt to tax the overseas income of their companies. Corporate executives and groups such as the U.S. Chamber of Commerce say U.S. multinational companies are disadvantaged in foreign markets because their competitors don’t have that residual tax in their home countries.
The Romney campaign hasn’t provided any details on how his international tax proposal would work. Romney wants to lower the corporate tax rate to 25 percent from 35 percent, which would reduce the incentive to relocate jobs and profits. He hasn’t said what other changes he would make or what tax breaks he would curtail.
“Mitt Romney has a comprehensive plan to reform the corporate tax code that will lower rates, get rid of incentives for firms to create jobs in other countries, and encourage the kind of economic growth President Obama has been unable to deliver,” Andrea Saul, a campaign spokeswoman, said in a statement.
The area where Obama is campaigning today, Cincinnati and its suburbs, is home turf for Republican House Speaker John Boehner, former Ohio Governor Bob Taft, a Republican, and Senator Rob Portman, a potential Romney running mate.
“That’s Romney territory,” said David Cohen, a political science professor at the University of Akron. “The point of Obama going there is not to cede any turf to Romney. He’s got to eat away at Romney’s margins.”
Obama, who won Ohio in 2008 over Republican Senator John McCain, led Romney by 47 percent to 38 percent in a June 27 Quinnipiac University poll. In the last election, Obama was the first Democrat in 44 years to win Hamilton County, which includes Cincinnati. The surrounding suburban counties backed McCain that year by a roughly 2-to-1 margin.
“It’s a fairly balanced state with a slight Republican advantage,” said Herb Asher, a professor emeritus of political science at Ohio State University in Columbus. “More Ohioans think of themselves as conservative rather than liberal.”
Working in Obama’s favor is the pace of Ohio’s economic recovery, which is faster than the national average, Asher said.
Ohio ranks sixth among the 50 states in its rate of improving economic health, according to the Bloomberg Economic Evaluation of States from the first quarter of 2011 through the first quarter of this year.
The state’s unemployment rate was 7.3 percent in May, lower than the national rate of 8.2 percent that month and down from a high of 10.6 percent in January 2010, according to figures from the U.S. Bureau of Labor Statistics.
In a sign of Ohio’s electoral importance, Obama has made 10 visits to the state since filing for re-election in April 2011, not including today’s trip.
Romney has likewise made Ohio a frequent campaign destination. He gave a speech in Cincinnati on June 14 -- the same day Obama was speaking across the state in Cleveland.
Before the forum with voters, Obama held a closed-door fundraiser at the Music Hall for the Obama Victory Fund, a joint fundraising committee of Obama for America, the Democratic National Committee, and several state Democratic parties, according to the Obama campaign. The event drew 25 donors at $25,000 per person, the campaign said.
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