Obama Wants to End Offshore Tax Avoidance for Corporates

Discussion in 'Wall St. News' started by ASusilovic, May 4, 2009.

  1. President Barack Obama will propose today to outlaw three offshore tax-avoidance techniques U.S. companies such as Caterpillar Inc. and Procter & Gamble Co. want to use to save $190 billion over the next decade and make it riskier for Americans to stash money in tax-haven banks.

    Obama and Treasury Secretary Timothy Geithner will target a strategy that allows U.S.-based multinational companies to effectively hide from the Internal Revenue Service the role their foreign subsidiaries play in shifting profits into low-tax jurisdictions such as the Cayman Islands, an administration official said.

    The proposal, affecting tax rules known as “check the box,” would net $86.5 billion in revenue between 2011-2019 by overhauling regulations created in Democrat Bill Clinton’s administration and later written into law by a Republican- controlled Congress after Clinton tried to withdraw the rules.

    The proposal, combined with a $60.1 billion plan to limit many expense deductions for American companies that take advantage of laws allowing them to defer tax on foreign profits and a $43 billion crackdown on abusive foreign tax credits, would be the biggest tax increase on U.S. corporations since 1986. Obama also would shift the burden of proof to individuals when the IRS alleges assets are being hidden in certain offshore bank accounts, the official said.

    ‘Bad Stuff’

    “This is bad stuff,” Kenneth Kies, a tax lobbyist at the Washington firm Federal Policy Group, said of Obama’s plans. “This is going to be the biggest fight for the corporate community in the next two years.” Kies represents General Electric Co., Anheuser-Busch Cos. and Microsoft Corp., among others.

  2. Whatever happened to globalisation.

  3. Bob111


    here is really bad stuff-


    everyone,who send the money abroad will be GUILTY by default,until they prove that they are not. nice..looks like i can't help my mom anymore..
  4. The problem is, the abuse of UBS, Caymans, etc was so rampant, it was only a matter of time until the Populists got in, and ran to the higher ground.

    this could have been avoided with some self - discipline.

    When you see the names, you;ll see this had to be done. But, as always, it will go too far the other way. It's been in the cards for years.
  5. Would you expect to see US Corporations relocating to friendlier shores

  6. Daal


    Wow, get out of the US folks. This is Bush legal treatment
  7. achilles28


    Barack is no different than Bush.

    This is tantamount to the military commissions act and the rollback of habeas corpus.

    Obama is no freedom fighter. More like a Big Government whore.
  8. indexer


    Could mean more opportunity for US based small businesses who don't enjoy the advantages of global tax, labor and regulation arbitrage that big multinational corporations do.
  9. achilles28


    I don't have a problem if loopholes are closed on Corps that don't pay tax.

    Its when Obama presumes the average American guilty before innocent when money is sent overseas. Thats complete bullshit.

    The Tax Code heavily favors Big Corporations at the expense of the "little guy" who doesn't have the coin to exploit all the hidden loopholes buried in the code. Thats why Tax Law is so complicated, to begin with - to provide a veneer of legitimacy as the middle class get looted and the ultra-rich pay nothing. Its a weapon of Control.
  10. Obama closing loopholes on big corporations? I don't believe it! It's politicians just like him that created those loopholes in exchange for campaign funds.

    It's properly a cleverly marketed tax increase for the bottom 90%.
    #10     May 4, 2009