Obama Targets Overseas Tax Dodge
Loopholes Would Close For U.S. Firms With Foreign Operations
We hear about tax loopholes so often as if they were some sort of dishonesty on the part of tax filers, but tax "Loopholes" come as a result of considered tax policy designed to promote the aims of the politicians who wrote the bills and passed the laws which provide for these loopholes. Most Democrats, not to mention Republicans, who are not fringe left politicians, understand the tax law better than does Obama. They will want Obama to understand for certain what he is about to do: probably cause more jobs to leave the US shores, and whole Corporations will leave, changing the headquarters to more friendly foreign locations.
"During an event at the White House, Obama said his proposal would raise $210 billion over the next decade and make good on his campaign pledge to eliminate tax advantages for companies that ship jobs abroad ..
Key Democrats [Baucus and Rangel] were cool to the plan, and said Obama's ideas should be considered as part of a broader effort to streamline the nation's complex corporate tax code.
"Further study is needed to assess the impact of this plan on U.S. businesses," Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, which has jurisdiction over U.S. tax law, said in a written statement. "I want to make certain that our tax policies are fair and support the global competitiveness of U.S. businesses." ..
There's a big difference between abusive tax avoidance and legitimate tax policy that recognizes the global economy," said Sen. Charles E. Grassley (Iowa), the senior Republican on the Senate Finance Committee. "To the extent the president continues on the road of cracking down on tax abuse, he can count on my support. But if he's using tax shelters as a stalking horse to raise taxes on corporations at the cost of U.S. jobs, he'll lose me."
The United States is the last major economy to tax the profits of locally headquartered companies, even if that income is earned abroad. Other nations, including most recently Japan and Britain, are moving to a territorial system that taxes only corporate profits earned within their borders ..
To level the playing field, Obama would bar firms from taking deductions for expenses that support their overseas investments until they pay U.S. taxes on the profits ..
By contrast, more than 200 U.S. companies and trade groups have signed a letter asking congressional leaders to oppose Obama's proposal to limit their ability to defer U.S. tax payments. The letter, signed by Alcoa, General Electric, McDonald's and Microsoft, among others, warned that restricting the deferral rules would make it difficult to compete abroad .."
Watch the video of Obama introducing and explaining this new tax initiative Washington Post.COM
Loopholes Would Close For U.S. Firms With Foreign Operations
We hear about tax loopholes so often as if they were some sort of dishonesty on the part of tax filers, but tax "Loopholes" come as a result of considered tax policy designed to promote the aims of the politicians who wrote the bills and passed the laws which provide for these loopholes. Most Democrats, not to mention Republicans, who are not fringe left politicians, understand the tax law better than does Obama. They will want Obama to understand for certain what he is about to do: probably cause more jobs to leave the US shores, and whole Corporations will leave, changing the headquarters to more friendly foreign locations.
"During an event at the White House, Obama said his proposal would raise $210 billion over the next decade and make good on his campaign pledge to eliminate tax advantages for companies that ship jobs abroad ..
Key Democrats [Baucus and Rangel] were cool to the plan, and said Obama's ideas should be considered as part of a broader effort to streamline the nation's complex corporate tax code.
"Further study is needed to assess the impact of this plan on U.S. businesses," Sen. Max Baucus (D-Mont.), chairman of the Senate Finance Committee, which has jurisdiction over U.S. tax law, said in a written statement. "I want to make certain that our tax policies are fair and support the global competitiveness of U.S. businesses." ..
There's a big difference between abusive tax avoidance and legitimate tax policy that recognizes the global economy," said Sen. Charles E. Grassley (Iowa), the senior Republican on the Senate Finance Committee. "To the extent the president continues on the road of cracking down on tax abuse, he can count on my support. But if he's using tax shelters as a stalking horse to raise taxes on corporations at the cost of U.S. jobs, he'll lose me."
The United States is the last major economy to tax the profits of locally headquartered companies, even if that income is earned abroad. Other nations, including most recently Japan and Britain, are moving to a territorial system that taxes only corporate profits earned within their borders ..
To level the playing field, Obama would bar firms from taking deductions for expenses that support their overseas investments until they pay U.S. taxes on the profits ..
By contrast, more than 200 U.S. companies and trade groups have signed a letter asking congressional leaders to oppose Obama's proposal to limit their ability to defer U.S. tax payments. The letter, signed by Alcoa, General Electric, McDonald's and Microsoft, among others, warned that restricting the deferral rules would make it difficult to compete abroad .."
Watch the video of Obama introducing and explaining this new tax initiative Washington Post.COM
