This is the Cato Daily Podcast for Thursday, February 18th, 2010.

I'm Caleb Brown.

President Obama's desire to tax multinationals must be reconciled with the fact that the United States has a very high corporate tax rate.

And jobs that are created around the world can either be created by U.S. multinationals or companies based elsewhere.

Cato Senior Fellow Dan Mitchell separates rhetoric from... or companies else,

and fellow Dan Mitchell separates rhetoric from reality.

Under current law,

there's a policy known as deferral.

Deferral helps companies, multinational companies, by allowing them to postpone or delay or

technically defer an extra layer of tax that the US government imposes on them on the profits they earn overseas.

Now of course those profits are already taxed in the countries where they're earned

and so the US policy that is known as worldwide taxation is double taxation and the policy

of deferral at least allows that to be postponed.

That's the good news.

The bad news is Obama wants to eviscerate and weaken the deferral policy which will put U.S.

companies at a further disadvantage when trying to earn market share abroad.

President Obama has talked a lot about punishing companies that remove jobs from the United States

and send them overseas.

What is the difficulty of actually trying to do that when it comes to

companies that have significant operations here? Well in some sense the

president is right. There is a big incentive right now for jobs to go

overseas. Why? Because the U.S. corporate tax rate

...