WASHINGTON(US News Wire) - Citing recent studies that show US companies are sheltering profits and shipping jobs overseas to avoid paying US taxes at a record rate, Democratic US presidential nominee John Kerry yesterday pledged to do what President George Bush has not - crack down on corporate loopholes to save US jobs and taxpayer money.

While George W. Bush has chosen fantasyland rhetoric over doing something as jobs have been lost and even pushed for more incentives for companies that export jobs, Kerry yesterday said he was offering a new choice and a plan that will create millions of good paying jobs.

“With our economy dragging and costs going through the roof, George Bush has done nothing to create jobs,” Kerry said. “In fact, the only plan he's come up with is one that actually makes things worse. Because of George Bush's bad choices, every year, Americans are getting robbed of at least $40 billion in taxes we're owed.”

Recent studies by the leading journal Tax Notes have found that companies are sheltering profits and shipping jobs overseas at record rates to avoid paying taxes. Profits sheltered by US companies in tax havens have jumped 69 percent under Bush and cost US taxpayers at least $40 billion.

Through loopholes like this, 45 percent of large companies have been able to pay no taxes at all in recent years.

Faced with this reality, the Bush administration has made the choice to defend outsourcing, and the Bush Treasury Department has even proposed more tax breaks for companies that move jobs overseas.

“The real test of leadership is how you respond if things go wrong,” Kerry said. “Do you face the facts and fix the problems? Or do you stick with your story and ignore reality? Time and time again, George Bush has proven that he's stubborn, out of touch, and unwilling to change course.”

Of note, a number of Bush administration officials once ran companies that benefited from sending US profits and jobs overseas. Under Vice President Cheney, Halliburton opened up 20 Cayman Islands subsidiaries to take advantage of tax breaks, and Treasury Secretary John Snow once ran a company that sent jobs abroad.

Kerry and John Edwards have a three-part plan to crack down on companies that outsource jobs and offshore their profits to avoid paying taxes. They will establish a new Office of Offshore Tax Enforcement at the Treasury Department to investigate offshore corporate tax avoidance and help develop new regulations.

They will also close loopholes like the Bermuda tax loophole that allow companies to escape taxes by taking advantage of complicated international tax rules. Finally, they will eliminate special tax breaks so companies are taxed the same whether they invest abroad or at home.

“In less than a month, you'll have a chance to change all this,” Kerry said. “I have a plan to build a stronger economy. When I'm president, we'll stop rewarding companies that ship jobs overseas and we'll start rewarding companies that create jobs here at home.”