WASHINGTON — President Barack Obama vowed Monday to "detect and pursue” American tax evaders and go after their offshore tax shelters.
In announcing a series of steps aimed at overhauling the U.S. tax code, the president 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 such as 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 campaign for the White House, said 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 down payment 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,” the president said. The current 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.”
by the associated press
In announcing a series of steps aimed at overhauling the U.S. tax code, the president 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 such as 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 campaign for the White House, said 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 down payment 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,” the president said. The current 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.”
by the associated press
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