Feeding the Hand That Bites You

Buyer's remorse may be setting in.

June 3 (Bloomberg) -- Microsoft Corp. Chief Executive Officer Steven Ballmer said the world’s largest software company would move some employees offshore if Congress enacts President Barack Obama’s plans to impose higher taxes on U.S. companies’ foreign profits.

“It makes U.S. jobs more expensive,” Ballmer said in an interview. “We’re better off taking lots of people and moving them out of the U.S. as opposed to keeping them inside the U.S.”

Obama on May 4 proposed outlawing or restricting about $190 billion in tax breaks for offshore companies over the next decade. Such business groups as the National Foreign Trade Council, the U.S. Chamber of Commerce and the Business Roundtable have denounced the proposed overhaul.

U.S. tax rules let companies defer paying corporate rates as high as 35 percent on most types of foreign profits as long as that money remains invested overseas. Obama says he wants to end such incentives to keep foreign profits tax-deferred so that companies would invest them in the U.S.

Microsoft reported an overall effective tax rate of 26 percent for 2008 in its last annual report. “Our effective tax rates are less than the statutory tax rate due to foreign earnings taxed at lower rates,” the report said.

For every action, it is said, there is an equal and opposite reaction, and unless you actually know something about economics -- and it's arguable whether the president and most of his men do -- you are going to be quite surprised at the unexpected, and unintended, consequences.

Most delicious irony of all is that Microsoft and its employees overwhelmingly donated to the political campaigns of Democrats in 2008. One source I saw put it at 71 percent Dems, 28.4 percent GOP.

How's that "hopey-changey" thing working out for you guys?