CINCINNATI (AP) -- The chairman of the world's largest consumer products maker says a provision in President Barack Obama's budget proposal regarding income made overseas would cost American jobs and give foreign businesses an unfair advantage.
A.G. Lafley, chief executive officer of the Procter & Gamble Co., said a proposal to limit or end deferred payment of taxes on foreign income would lead to job cuts and higher prices for American consumers and would cost companies billions.
U.S. companies now are allowed to defer payment of taxes on foreign income until those funds are brought back into the country. Requiring immediate payment of taxes would give an edge to foreign competitors, such as L'Oreal, Unilever, Nestle and Kao, Lafley said.
In a guest column in Sunday's editions of The Cincinnati Enquirer, Lafley decried "the unintended consequences of a proposal that may sound good on the surface but could undermine American companies, workers and consumers."
"At P&G, we support efforts by the Obama administration and Congress to promote job growth, improve infrastructure and invest in innovation," Lafley wrote. "And we take our responsibility as an American corporate citizen seriously. We dutifully pay among the highest corporate tax rates in the world as a U.S.-based company.
"We also understand the need to produce new revenue to help pay for economic stimulus plans designed to produce or preserve jobs. But if the budget proposal to eliminate tax 'deferral' is adopted, it would have the opposite effect."
Foreign-based competitors would be able to reinvest more, expand faster and sell their products at lower prices than U.S. companies, Lafley wrote.
"Over time, American multinational companies would be unable to effectively compete against foreign corporations. This would lead to reduced employment and lower wages for American workers, reduced corporate investments, and higher prices for American consumers because increased tax costs are passed through to them."
The company's include 23 with at least $1 billion in annual sales, such as Tide detergent, Pampers diapers and Gillette shavers.
Lafley, P&G's chief executive since 2000, has used Enquirer guest columns before to take P&G's views to the public. Last October, he wrote that customers and suppliers were feeling pinched by the credit crunch, and he urged the public to help persuade Congress to pass a bailout package.
Procter & Gamble's stock was trading at $70.55 then, about $5 below its 52-week high. In midday trading Monday, it was down $1.61 at $46.96.