Business leaders sharply critical of Obama's plan to crack down on overseas tax shelters-by Christi Parsons and Peter Nicholas
Christi Parsons and Peter Nicholas The proposed crackdown consists of two main proposals. The first targets wealthy people who use foreign tax havens such as the Cayman Islands to hide resources from the Internal Revenue Service. The second proposal would change the way multinational corporations are able to deduct expenses incurred in foreign countries to reduce or avoid U.S. taxes -- a practice Obama said encourages the shifting of jobs overseas. The president described the issue as one of simple fairness. The goal, he said, is to end a "tax scam" by shutting down overseas tax havens that let U.S. multinational corporations and some individual taxpayers avoid paying U.S. taxes while ordinary Americans take up the slack.
Note EU-Digest: Mr.Obama is doing the right thing. Each year, America loses hundreds of billions of dollars in revenue because major corporations, federal government contractors, and Wall Street insiders fail to pay their fair share of taxes.As part of his 2010 budget, President Obama has proposed aggressive action against corporate tax loopholes and wasteful subsidies. More than 60 percent of U.S. corporations failed to pay any federal taxes from 1996 through 2000 when corporate profits were soaring and that corporate tax receipts had fallen to just 7.4 percent of overall federal tax revenue in 2003 – the lowest since 1983 and the second-lowest rate since 1934 – is an outrage. But it should come as no surprise to anyone who has been paying attention to national tax policy over the past few years. The General Accounting Officealso found that an astonishing 94 percent of corporations reported tax liability of less than 5 percent of their total income during the same time period. Corporate tax dodging has gone on for far too long. • The cost to taxpayers due to the use of offshore tax havens is as high as $100 billion per year - $1 trillion over 10 years. U.S.-based individuals and corporations who pay taxes on their revenues must shoulder this burden for those who do not.
