John Kerry & Benedict Arnold

Posted: Apr 01, 2004 12:00 AM

If Democrats believe anything these days, it is that it is wrong to question anyone's patriotism. For John Kerry, this is a matter of sacred conviction. He calls the defeat in 2002 of former Georgia Sen. Max Cleland "the most craven moment I have ever seen in American politics," because "the Republican Party challenged this man's patriotism." He routinely vows to fight back with a fearsome "message for those who try to challenge the Democrats and say to them 'you're unpatriotic.'" In Kerry's book, only the desperate hurl such charges: "It's curious to me how angry they get and how they throw patriotism around and so forth."

Curiously, this is the same John Kerry who nearly every day on the campaign trail has said a version of this: "We're going to shut down any incentive, any reward or any kind of benefit for any Benedict Arnold company or CEO that takes American jobs overseas and sticks the American people with the bill." Benedict Arnold. This Revolution-era general wanted to hand West Point over to the British in exchange for cash and other inducements. He is the most famous traitor in American history. So Kerry has routinely accused American businessmen of treason. What was he saying about the lowdown tactic of questioning people's patriotism again?

Kerry has now released a plan to deal with the issue of "outsourcing." One would think it would involve jail, or re-education camps, or at least the mandatory recitation of the Pledge of Allegiance -- sans the phrase "under God," of course -- by everyone heading an American business. Instead, Kerry is proposing changing the mix of tax incentives for American corporations. On Kerry's own terms, this is absurd -- like offering Benedict Arnold increased child tax credits, free dental care and college aid for his five children to try to keep him from betraying his country.

Unless Kerry's "Benedict Arnold CEO" line is a ridiculous, demagogic and unworthy smear of American business. His own tax plan exposes it as exactly that. Kerry wants to repeal a provision that allows companies to defer paying taxes on profits from overseas operations and -- in order to keep corporations from getting too hard hit by a more onerous tax burden -- also to cut the corporate tax rate. Imagine that -- lower taxes for the treasonous! That's even worse than a tax cut for the merely rich. Kerry thus makes a huge intellectual concession: that businesses respond to incentives, that taxes and regulations affect their behavior and that tax-cutting Reaganites have always had a point.

In fact, a reason U.S. corporations do business overseas is that U.S. corporate taxes are so high compared with other countries. They operate overseas for other perfectly benign reasons: to be closer to foreign customers and to achieve efficiencies that make them more productive. Why this is considered a bad thing is not clear -- except that it makes for an easy pander to economically illiterate voters. Companies with thriving overseas operations create management jobs back here in the United States, and most economic literature suggests that the phenomenon of "outsourcing" was a key factor in the glorious boom of the 1990s, lowering prices and thus keeping inflation low as economic growth soared.

But let's do the favor of taking Kerry's rhetoric seriously. CEOs seeking foreign customers and lower taxes abroad are "Benedict Arnolds," selling out their nation for venal reasons. Teresa Heinz Kerry owns millions in stock in the Heinz Company, the ketchup and pickle empire. Of Heinz's 79 factories, 57 are located outside North America, and 72 percent of its work force is offshore. John Kerry is, by his own logic, married to a woman implicated in acts of treason. Kerry's defense of the nation from dastardly betrayal should begin at home.

Meanwhile, the candidate has said he will roll out other parts of his economic plan sometime soon. If he is to be true to the spirit of his own words, the next installment should involve leg irons.