Kerry says his plan would trigger 10 million jobs

WARREN, Mich. -- Senator John F. Kerry, confident he can beat President Bush this fall in swing states like Michigan and Missouri by focusing on job losses there, said yesterday he would create 10 million jobs in his first term as president by cutting corporate taxes and repealing a Kennedy-era tax incentive that leads companies to move jobs overseas.

The presumptive Democratic presidential nominee visited Detroit and this suburb one day after the Bush campaign began airing a commercial in Michigan and 17 other tossup states that cast Kerry as a tax-hiking, big-government liberal. With these new proposals for tax cuts and new private-sector jobs, Kerry hopes to derail the Republican image-makers and score victories in several of those states, offering himself as a centrist-minded fiscal steward in the mold of Bill Clinton.

"Some may be surprised to hear a Democrat calling for lower corporate tax rates," Kerry said in a speech at Wayne State University in Detroit. "The fact is, I don't care about the old debates. I care about getting the job done and creating jobs here in the United States of America."

Kerry's tax plan marked the start of a new phase of the Democrat's campaign, advisers said: With 2,000 party leaders and rank-and-file Democrats having united behind him at a Washington fund-raiser Thursday night, including almost all of his rivals for the nomination, Kerry now wants to reach out to independents and Republicans by laying out alternatives to the Bush administration on issues from taxes to health care to national security.

Yesterday's speech was slated as the first of three on the economy that Kerry said would counter the Republican attacks that he is a proponent of bigger government. Of his job creation plan, he said, "We won't do it through government make-work, but by making our economy work so that businesses put Americans back to work."

Voters in the Rust Belt have emerged as a particular target for Kerry, who began running a short biographical ad Tuesday in Michigan, Missouri, Ohio, Iowa, and 13 other states. The ad introduces him as a veteran and an advocate for change.

Michigan went for Al Gore in 2000, and political analysts believe that, with 300,000 jobs lost since then, Kerry has a strong shot of holding the state. The Kerry campaign also sees Missouri as in play; Bush won there in 2000, but the state has lost nearly 50,000 jobs in the last three years, and Kerry plans to campaign there aggressively with US Representative Richard A. Gephardt. The two are scheduled to lead a rally in St. Louis this evening.

"States like Michigan are a working man's states, so there's no doubt to me that Kerry will do well here," said Vince Rose, a 46-year-old business consultant and Democrat who attended Kerry's speech at Wayne State yesterday. "I have cousins who have been laid off. It's just crazy that we have people who want to work who can't find jobs."

Kerry's plan to create 10 million jobs -- a plan that Republicans branded yesterday as unworkable and ineffectual -- depends on an array of tax cuts and changes in the tax code. The centerpiece is an end to a tax break enacted in the early 1960s, known as deferral, that allows US companies to delay paying taxes on foreign income so long as those profits are reinvested in those overseas operations.

Kerry said this change would strip away an incentive for companies to move jobs abroad and generate about $12 billion annually, which would be used to pay for a 5 percent reduction in the corporate tax rate, from 35 percent to 33.25 percent. Citing IRS studies, campaign advisers contended that 99 percent of US companies would owe less in taxes after these twin changes.

The plan also includes a one-year "tax holiday" for corporations that invest foreign revenues into their US operations, proposing to tax those profits at a special 10 percent rate.

The Bush campaign panned Kerry's proposals yesterday, tapping Senate majority leader Bill Frist and former presidential candidate Steve Forbes to assail the Democrat's approaches to taxes. Frist accused Kerry of "hypocrisy" for backing corporate tax cuts, saying Kerry does not have a record of aiding corporations, while Forbes derided the plan as a "bonanza for K Street Washington lawyers" because it was overly complicated.

At a union headquarters rally in Warren last night, Kerry drew praise from Michigan Democratic leaders such as US Representative John Dingell, who -- in the sort of rhetoric that Kerry tries to avoid -- called on the senator to oust "the evil Republicans" from Washington.

Patrick Healy can be reached at phealy@globe.com.