I'm tired of hearing that companies get a "tax break" for moving jobs overseas. The President repeated this a couple of times during his dabate with Mitt Romney. I'll buy dinner up to $500 for the first person to show me the section in the tax code that does this.
Don't bother, it doesn't exist.
Here's what they're really talking about (very simplified):
It's 1992. A business builds a new facility in the US for $30 million. They don't report a $30 million dollar expense on their financial statements, but rather record a $30 million investment (the "book" value) and record the expense of the investment over a period of time, say 30 years (a normal practice under Generally Accepted Accounting Principles or "GAAP").
This is called "depreciation". For the next 30 years, the company will deduct $1 million per year to account for the expense of investing in this facility. Accountants like to explain that they're accounting for the reduction in the value of the asset ("depreciating" the asset and reducing book value), but what they're really doing is covering the cost of the investment over time instead of all at once.
Now it's 2012. The facility isn't making money. Maybe it's outdated. Maybe labor costs are too high. Maybe regulations are too strict. Maybe the facility is just badly run. Maybe all of the above. It doesn't matter why. So the company decides to move the facility overseas to save money.
The facility is still worth $10 million on the books, meaning they've depreciated $20 million of the original cost of the building. Maybe they can only sell it for $8 million. Or maybe they can't sell it and just close it entirely. In any case, the company has to state the difference between what it's worth on the books (its depreciated book value) and what they sold it for (its "market value") as a loss on their financial statements. This is required by both GAAP and by law. If they didn't do this, they'd be fined by the Securities and Exchange Commission for not reporting the loss.
Alternately, say the company gets $12 million for the facility that's "worth" $10 million. They must now record a financial gain from selling it for market value over book value and pay more taxes. That's not what happens in this case. In this case, facility is a total loss.
So, before they closed the facility, the company would have made $20 million and would have paid $7 million in taxes. Now the company closes it entirely and reports the $10 million loss. So instead of reporting $20 million of income, the company reports $10 million of income and pays $3.5 million in taxes. According to some, that $3.5 million difference in taxes paid is a "tax break" for moving jobs overseas.
Losing $10 million is one ugly way to get a "tax break". It's a false narrative and those who push it depend on your ignorance of basic accounting.