http://www.msnbc.msn.com/id/30557517 Obama cracks down on overseas tax loopholes President’s two-part plan calls for hundreds of new federal tax agents WASHINGTON - President Barack Obama vowed Monday to "detect and pursue" U.S tax evaders and go after their offshore tax shelters. In announcing a series of steps aimed at overhauling the U.S. tax code, Obama complained that existing law makes it possible to "pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York. " The president said he wants to prevent U.S. companies from deferring tax payments by keeping profits in foreign countries rather than recording them at home and called for more transparency in bank accounts that Americans hold in notorious tax havens like the Cayman Islands. "If financial institutions won't cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly," Obama said. The president, who hammered on this issue during his long campaign for the White House, said at a White House event that his plan would generate $210 billion in new taxes over 10 years and "make it easier" for companies to create jobs at home. Over a decade, $210 billion would make a modest dent in a federal deficit expected to swell to $1.2 trillion in 2010. Under the plan, companies would not be able to write off domestic expenses for generating profits abroad. The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries. He said the government also is hiring nearly 800 new IRS agents to enforce the U.S. tax code. Congress is expected to resist significant portions of Obama's plan. The administration is not seeking to repeal all overseas tax benefits. Obama called his proposal "a downpayment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations." "Nobody likes paying taxes, particularly in times of economic stress," Obama said. "But most Americans meet their responsibilities because they understand that it's an obligation of citizenship, necessary to pay the costs of our common defense and our mutual well-being." Tax havens abuse The current tax code, he said, makes it too easy for "a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all." Obama said he was willing to make permanent a research tax credit that was to expire at the end of the year and is popular with businesses. Officials estimate that making the tax credits permanent would cost taxpayers $74.5 billion over the next decade. But administration aides said 75 percent of those tax credits cover the cost of workers' wages. Under existing laws, companies with operations overseas pay U.S. taxes only if they bring the profits back to the United States. If they keep the profits offshore, they can defer paying taxes indefinitely. Obama's plan, which would take effect in 2011, would change that. Obama officials also said they would close a Clinton-era provision that would cost $87 billion over the next decade by letting U.S. companies "check the box" and treat international subsidiaries as mere branch offices. Officials said it was meant as a paperwork shortcut that is now a widely used and perfectly legal way to avoid paying billions in taxes on international operations. Treasury Secretary Timothy Geithner joined Obama for the announcement. He said the proposals would end "indefensible tax breaks and loopholes which allow some companies and some well-off citizens to evade the rules that the rest of America lives by." Geithner called them "common-sense changes designed to restore balance to our tax code." The White House said that in 2004, multinational corporations enjoyed an effective tax rate of 2.3 percent in the United States because of such allowances. Aides said that was the most recent year available for analysis. They said the situation was indefensible.
Once again, Obama tries to play politics and appeal to the lowest common denominator in American society. He's trying to appeal to everybody's gut reaction based on the fairness principle. The sheeple will think, "hell yeah, these big, bad, evil corporations have been screwing us for years, let's go after them". But really, Obama will miss the big picture - the corporations will simply move their headquarters (and the associated jobs) to other places. We already have seen this happen in the energy industry. Another massive fail by Obama trying to do something he thinks is smart, but he doesn't fully understand or consider the side effects.
I can appreciate that you don't like taxes.... but how can you be in favor of rewarding the people who cheat at the expense of all the honest, hard working people who pay what the law says they should? There is no justification ever for cheating on your taxes.
Does this bother anyone else? It bothers me a lot. It may just be rhetorical, but President Obama using "guilty until proven innocent" rhetoric is downright scary to me. I hope it's just tough talk.
This will backfire in a major way. No company in their right mind will want to have their HQ in the US after Obama is done with his incredibly naive ideas. This is all just going to drive prices higher, investment returns lower, and kill jobs. Nice work! Hey, someone has to pay for the trillion+ dollar decificits and it sure as heck ain't gonna be the Obama voters!
That stuck out to me too. I thought, "what the hell does he mean by that?" But, it's very avgue. He could mean he's going to put their execs in cement shoes or he could mean that they will legislate on tax havens without the input of uncooperative banking institutions. I'm not sure which.
Hell ya! Here's hoping to Obama's "tax only McCain voters" bill passing the senate asap! See T_J? You should have voted Obama in order to not have to pay for the deficit.
The self proclaimed voice of the country club Republicans speaks. Time to change the laws so "the corporations (won't) simply move their headquarters (and the associated jobs) to other places. Sometimes I wonder about the patriotism of these country club Republicans,--too good to serve in the military, and they support our corporations moving overseas and not paying taxes. Really no allegiance to the country just his corporation, I guess. The sad thing is that an employee like Bigtexx may wind up bitter when the corporation does not return his somewhat touching loyalty and lays him off.
Weak post, Max. Don't be so lazy with your rebuttals. Take a look at the number of energy companies that decided to move to Switzerland and other locales right around Obama's inauguration. ...and that's just the energy industry.
Probably better to worry about the patriotism of our President, who pushes garbage like this article in an effort to please his sheeple instead of doing what's best for America.
I know, I really should work harder. I'll keep trying, because your opinion of my posts here is really important to me. That Bush presided over a mass exodus of jobs overseas is indisputable. I'll ask Clutchfans to take judicial notice of it without me having to enter an exhibit.
red herring, energy companies have been and will continue to move their headquarters overseas. you know why, because they operate overseas.
