Wednesday, May 6, 2009

Obama Seeks $210 Billion From Overseas Corporations And Tax Havens

One of the most inexplicable and frustrating features of the U.S. tax code in recent years has been the granting of breaks to corporations that relocate overseas. These industries shed American jobs, preferring to pay sweatshop wages in Third World countries. Naomi Klein explained the process in her groundbreaking work on globalization, "No Logo." In addition, wealthy individuals have been allowed to park millions in offshore tax havens.

If we had to make up for the loss of revenue by raising payroll taxes and by slashing away at infrastructure, education and other essential services and by borrowing more money from Asian banks...well, hey, that was the cost of doing business!

President Obama is seeking to end or at least modify these foreign tax dodges. It couldn't come at a better time, when the nation is experiencing a recession and the administration is seeking to expand health care and develop alternative energy sources. Naturally, the president's opponents are ready to man the barricades on behalf of corporate welfare:

President Obama...called for curbing offshore tax havens and corporate tax breaks to collect billions of dollars more from multinational companies and wealthy individuals.

The move would appeal to growing populist anger among taxpayers but is likely to open an epic battle with some major powers in American commerce.

With the proposals he outlined at the White House, the president sought to make good on his campaign promise to end tax breaks “for companies that ship jobs overseas.”

He estimated the changes would raise $210 billion over the next decade and help offset tax cuts for middle-income taxpayers...

...Mr. Obama said most Americans paid taxes as “an obligation of citizenship,” but some businesses and rich people were “shirking” their duties, “aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals.”

“It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share. It’s a tax code that makes it all too easy for a number — a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all,” the president said. “And it’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.”

2 comments:

TheWildJoker said...

I like your blog...read it regularly and Tweet it on Twitter...

Great Article

Jeff Tone said...

WJ: Thanks for your kind words and the publicity!