Obama to Close US Tax Loophole
 

http://www.cnn.com/2009/POLITICS/05/...ode/index.html

WASHINGTON (CNN) -- The White House will unveil reforms to the nation's international tax code on Monday intended to close loopholes for overseas tax havens and end incentives for creating jobs overseas.

Senior administration officials briefed reporters Sunday evening in a conference call ahead of the announcement that will be made by President Obama and Treasury Secretary Tim Geithner.

The two components of the president's plan include reforms that ensure the tax code does not handicap companies seeking to create jobs at home, as well as reforms that reduce the amount of tax revenue lost to tax havens.

The White House is targeting companies that use loopholes in the law that allow them to legally avoid paying billions in taxes. It also focuses on wealthy individuals who break the law by creating hidden overseas accounts.

The Obama administration plans to raise $103.1 billion by removing tax advantages for investing overseas and will use that money to help make a tax credit permanent, the officials said. The administration also hopes to raise $95.2 billion over the next 10 years by cracking down on overseas tax havens.

The White House, under the plan, would eliminate the "check-the-box" provision which allows corporations to designate overseas subsidiaries as branches of the company, not subjected to taxes. This tax loophole enables companies to avoid paying U.S. taxes.

One senior administration official said it has cost the U.S. government $86.5 billion over 10 years and is "the most unjustified loophole in the international tax system which needs to close down." It is a legal practice, the officials said, involving "companies taking advantage of a very bad law."

The U.S. government also loses about $9 billion in tax revenue from wealthy individuals who use illegal tax havens overseas, a senior administration official said.

The White House will announce the changes as part of the administration's budget. The plans include the Internal Revenue Service hiring almost 800 employees, who would be devoted to cracking down on overseas tax abuse.

The administration expects these initiatives to raise at least $210 billion over the next 10 years "to cut taxes for American families, increase incentives for businesses to create jobs in America and reduce the deficit."

When asked about the intense lobbying effort already underway against these reforms, including 200 opposition letters sent to Congress, a senior administration official said, "We expect many lobbying against us ... "

Wow, I finally agree with something obama wants to do.. The companies that choose to move their operations offshore should be taxed to the hilt for moving jobs away from Americans here at home..:2 cents::thumbsup

except for the fact that we are a global economy where a company in New Jersey has to compete with a company in Bejing China with different tax rates, labor costs etc.

These stories always end the same. The intent is to raise revenue and it pushes more revenue offshore, kills jobs and lowers revenue to the government. We already have the second highest corporate tax rates in the world... and now that will again go up... and somehow you think thats going to benefit the economy and nation.

The most you can do is create the most attractive business climate possible so that people will take advantage of it. So congrats to pushing more money out of the economy and more jobs offshore in the middle of a major recession.

and this idea of "protecting jobs at home" is the silly dream of a hopeless retards which have no understanding of the basics of macro-economics. you can't legislate economic growth. you can't force the world to buy your products. all you can do is offer value. and you don't get to determine what the buyer considers to be value. that is determined by a free market and now, in a global economy.

Welp, I guess this is the first step to taking away incentives to offshoring....

Interesting read. But, I think globalization is a good thing. Maybe they don't need to protect jobs at home so much.

So US corps hiding loot outside of the US, and not paying taxes to the US govt for this hidden revenue, helps the US economy how?

in much the same way you getting to write off your mortgage interest does.

There should be NO corporate tax. NONE. When money is taking out of a corporation and put into the hands of a person, that money is taxed.
There is no reason (except to grab cash from the "evil corporations") to tax a corp directly.
intelligent people understand this.

what this probably would do in all cases where its possible is to drive these multinational corps completely offshore.
oh, and did you catch this?
you won't find it in the CNN story because they are a liberal mouth piece:

""""Obama also planned to ask Congress to crack down on tax havens and implement a major shift in the way courts view guilt. Under Obama's proposal, Americans would have to prove they were not breaking U.S. tax laws by sending money to banks that don't cooperate with tax officials. It essentially would reverse the long-held assumption of innocence in U.S. courts.""""

exactly!


.

well... one could ask the opposite... how did the economy continue to grow through the last century with all these things being possible, with tax havens being used and with less legislation against these things 50 years ago than today?

again.... all you can do is create the most attractive climate possible. you can't force companies to be successful. you can only create the conditions that encourage, embrace and reward success. you can't punish success.

there are negative consequences to higher taxes.
there are positive consequences to lower taxes.

This has nothing to do with us being able to compete in the global economy. I compete in the global eco, the store down the road, doesn't.

I don't need the law they closed, to be able to compete on the global scale anymore or less than I currently do.

This has everything to do with people that live in America, run a company here, but hide the money off shore for the labor produced here, and then pay themselves, other companies that pay them, while the staff pays all taxes here... making the owner, richer..

The people doing this aren't doing it to compete on the global scale. They are doing it because of greed.

If you want to open, a legit company, off shore, and run it how you should with staff at the company, and the labor being produced is off shore, then that company won't have to pay taxes... it wouldn't be an American ran company.

Nobody is closing legit business that allows us to compete in the global eco.

incorrect.

this specifically is incorrect. whenever a US citizen is paid, its taxed. believing (or saying) otherwise is just not true. Is it what the vast majority of the Obama electorate believe? yes. but then, he needed a populous who doesn't understand the world they live in to buy into his promises and lies.

Oh come on 12clicks... you have to at least point how how I'm incorrect.. Just saying it, doesn't mean I am.

I have no idea what Obama said about this, so I'm not going off what he said.

When the person gets paid, it's taxed.. Nobody is arguing that. But we all know Owners don't have to be paid, thus not taxed - and when it's offshore, hidden away...

Lets look at our own Industry. This setup that they are blocking is what allowed the massive amount of U.S. based programs to move off shore, not pay money on assets that moved, moved the money, setup a tiny taxed corp to pay U.S. working staff, setup no offshore staff/office (subsidiary branches of the company with no staff in the location) and then setup offshore merchant accounts..

And through being anon, hidden away, and protected... they screwed our Surfers to death... Made millions more, paid even less tax, then hired a bunch of 3rd world people, fired all the Americans.. and the owner(s) still lives here - some with a smaller staff and none with offshore staff IN an actual office offshore.



I'm a U.S./Canadian Business owner with International partners.. So I try to say read up a little bit but will take any insider info you have. Politics aside...

so basically if you have an opperational office in US. you could
1. risk having all your foreign revenue be taxed twice (once in that countries and again in the states)
2. move your opperation to canada, take advantage of the free trade agreement to sell your stuff to the states and avoid the problem completely.

and you wonder why we make fun of democrats.

I think that one of the business that swarmed over sees was the oursourced Help Desk and that should never have happend. They were give MAJOR tax cuts for that and I know a FEW people that lost their jobs because of it.

Exactly. Bravo.

It is nice to see him going after business tax cheats before trying to eliminate the homestead tax write off that could hurt the home front.

:thumbsup

:2 cents:

This is the dumbest fucking thing anyone has ever posted on the subject... hand down. First of all, corporations are entities all on their own. They have their own credit rating, etc. Not only that... the govt provides a TON of services to corporations... especially multi-nationals. It has nothing to do with "evil corporations"... Thanks for playing... you are a retard... thx.

I don't understand why you would run around trying to prevent people from investing in more lucrative areas as opposed to creating more lucrative areas to invest to.

Look if I have $10 million to invest I'm most likely not an idiot... and even if I am an idiot, I am paying some really smart people a lot of money to get me what I want... which is more money. If I can make more money by investing in Dubai than I can in Montana, I'm going to invest in Dubai regardless of what some lawmakers think they can make me do.

Every time an obstacle is thrown out, smart people find a detour. Stop punishing basic logic and start creating our own incentives for reinvestment. There is a reason new power plants, new warehouses, etc are not going up in California... and it isn't because of lack of investment capital.

Gonna have to disagree with you there, Sparky. Your post did nothing to show why corporations should be taxed.

Would this investment be motivated by greed or patriotism? The funny thing about this logic is that the minute that your foreign investment is threatened you will want govt intervention... :2 cents:

You failed to read then... corporations use government services just like anyone else. Should they not contribute to the cost of those services like anyone else? There are literally thousands of different corporate services provided by the govt.

My thoughts exactly.
:thumbsup

This doesn't stop people from investing... invest away.

Think of this like business, well it is business.. anyway, they can't 'correct' the tax problems, before they stop the loop holes first, so they can get a real total.

Program owners for example, the software works but it's broken. You aren't going to rip the entire program out, and replace it overnight.. that would be crazy. But what you would do is patch it, correct the biggest problems fist, get it stable so you can see proper stats - and then rebuild it, side by side. This way you know what parts need to be rebuilt..

Cali needs to kick out all the illegals, make dealing with illegals, very illegal, in schools, hospitals, everything... and Cali will unscrew itself.

when you grow up (provided you continue to learn) you'll one day feel differently.

Companies are in the business to make a "Profit" it has nothing to do with greed or patriotism.
If your not in "Profit" you go out of business.

People, Corporations SHOULD be taxed... Actually, based on LAW and how the entire Country is setup, the only people being taxed should be Corporations.

It's a PRIVILEGE for you to own a Company... Not a right. If you want to do legit business, which costs the gov and state billions of dollars, to make sure you people aren't screwing buyers and each other over, the eco, etc...

CORPORATIONS MUST BE TAXED.. or we would look like all the 3rd world countries that don't tax corporations.

Good lord, use your heads..

How about working on a Fair Tax and quit this hunt and seek bullshit?

I'm 40 years old and plenty "grown up"... thx for playing. I hope that one of these days you actually apply brain power to what you post... because you rarely post anything that passes a simple logic test. Ideology shouldn't rule your logic. The most common flaw I notice about the things that people like you, Pussyman, Pleasurepays and others post is that they take a very narrow view of the subject and don't take real world conditions in consideration.

You can't logically put a fair tax in without knowing how much we should tax. And nobody is going to know that, until we can actually see the amount of money that should be taxed and how much can be earned.. then, we can see how much "FAIR" can be applied to the word Tax..

What are you talking about Privilege? Is there some King on a throne that says you can have a business?

Everyone has the "right" to own a business.

EU already has 39 votes in to the European council to completely get rid of ANY AND ALL bank secrets in the EU. All the bailouts given the last months now need to be "re-funded" I guess and taxes are getting sharp as a knife world wide. Mark my words. All countries will work together on this soon.

They NEED the money and the enemy of my enemy is my friend so all countries will soon rat out on all foreign accounts in their countries in exchange for the same intel back.
Fines will be raised soon by the tax office for hiding money. From 50% to 100% FINE here in The Netherlands.

This is where you're wrong.
Owners don't have to be paid? really?
and what about corps that have shareholders as owners?
what you believe in this case simply isn't true. not only that, the mighty obama is choosing to close an allowable deduction, NOT an illegal way of tax evasion. its no different than him proposing to close the "mortgage interest loophole"
its all hyperbole to gull the less intelligent. (not you specifically) :winkwink:

Who invests for patriotism? Seriously? Who? Do you buy a house because you are a local patriot and want to support your community by paying property taxes? Uh, no. You buy a house because YOU want to buy it for personal (read: greed) reasons and you also want it to turn an investment in the long run. There is absolutely nothing wrong with that... it's your money, your life, you deserve that.

The rest of your statement doesn't really make sense. Where is my foreign investment threatened? Where and why will I want government intervention?

All I said is that the United States needs to create better investment opportunities for people... be it Americans or foreigners. There is a reason people are investing in the "developing world" over the United States. Yeh, some of it is shady, but a lot of it is legit.

Im sorry for you then. hopefully you don't reproduce.

You are born with it? It's in the constitution? It's a law? It can't be taken away? You don't have rules to follow?

Where is the rights printed at?

wow.
just wow.
I'm done here.
ignorance must be bliss.

I agree with you... however, that has very little to do with this conversation. The real question is whether you structured your company to use tax havens... or if you set up your company correctly to begin with. This whole argument about how much companies pay in taxes is a false argument. The GAO already reported that most large corporations don't even end up owing taxes and that they spend quite a bit on tax avoidance. The reason that I say it's a false argument is purely based in FACT. If the US was such a poor business environment, we wouldn't be the financial force that we are. The problem we are facing now isn't taxes... it's a terrible trade policy that devalues US goods and favors foreign imports.

Huh? Yeah, my Company pays my car, I don't... Thus I don't take the pay on the car (ie not taxed on it) and my company gets to take the reduced net income, ie: paying lower taxes.

That's Really simple..

This has nothing to do with shareholders.. Shareholders aren't responsible for companies, the directors are.

It has to do with Companies. And the loophole is directly related to those companies not actually having a business offshore, but acting like they do to hide money. Not those that run a legit business offshore, with employees, an office, etc.

They check a box, say they have a company offshore, they really don't meet the "legal requirements" but can use this loophole, to scape by. Once closed, they will have to actually have an offshore business that does business offshore, with staff... like the "law" says..

When you setup like this, the reason you will be guilty first, is because YOU ARE knowingly breaking the law. Nothing to prove with this, it's a tax loophole that is used by people to evade taxes..

Well... Name ALL the 1st world Countries that you can be a citizen of, have a business in that country, and pay no Corporate taxes with.

I know some places have lower taxes, I know some don't have the same taxes we do.. But they ALL still tax. Even offshore, companies.. the minute you do local business, bam - taxed.

Yet, for some reason.. You don't think Companies 'need' to pay taxes..

I think you have it backwards. Why should anyone get a tax break for sending work outside the company?

The way it stands right now is we are rewarding American companies for fucking our economy. We are sending jobs to other countries, not hiring Americans, and getting a tax break in the process.

I'm tired of this crap. I had to Countrywide last week. It took me four tries to get through. When I did get through I got someone who was obviously in India. The connection was horrible, the person barely spoke English. So instead of hiring five hundred Americans to run their call center, Countrywide is saying "Fuck hiring Americans", is fucking our economy, and getting tax breaks for it? (Don't tell me about the costs involved in running a large call center. Before I worked in adult I managed a call center with hundreds of employees. I know the costs are staggering.) We should be nailing any company that uses employees outside the country and taxing them double.

Our tax system is a fucking joke. I just paid my taxes; I can see what I made and what I paid in taxes. We have so many loopholes in our tax system that it's no longer funny. Only idiots pay taxes.

the options are simple:

1) pay higher taxes, reduce profit, reduce operating capital and put yourself in a weaker financial and less competitive position and be forced to simply move certain aspects outside the USA anyway

or

2) pay less taxes, increase operating capital, improve growth and new investment in your company and strengthen your position in a competitive global marketplace



if you people truly believe there are no negative economic consequences to increasing taxes.. then why not tax them at 100%? if they refuse... then they're just "greedy" right?

Let's say you invested in an XYZ Company that you started in Venezuela some years ago. There was a fresh market there and lots of opportunity to make some money. However, the government there later decided to nationalize your company... This is where the US Govt. will help you retrieve your investment so that you don't lose everything.

Here are some examples of services that the government provides for multinational corporations.

Patent Protection
Litigation Assistance
Intellectual Rights Protection
Export Financing
Political Risk Insurance
...
...
more and more

This loophole change isn't a tax increase. YOU and your Company isn't going to pay more taxes because of this. That would be a tax increase.

So #1 isn't a factor.. So how about #3

3#) Correct the loopholes, remove the money going offshore, take away tax breaks for doing that, give tax breaks for coming on shore, and then...... give tax cuts. But that can only be done, after the 'problems' are corrected.

so... by "services" it seems you mean... those basic things guaranteed by international law or that any developed nation offers including "offshore" zones.

stick to your copyright piracy gibberish - you're out of your league here.

hahaha move your operation to Canada ahahahahhahah

now, that would just make too much sense:2 cents:

Actually U.S. and Canada have amazing trade agreements... And by having a Company in both locations, one being a manufacture and the other a distro, you can get out of almost all related sales/transaction and cross country mergers, etc. and cross money investment isn't taxed at the full rate.

Wow, President Obama makes a tax proposal and the most conservative posters on GFY think it's a bad idea?

SHOCKING.

By services I mean exactly what I posted... as usual, you somehow think that means that corporations should get this service for free but in the same breathe would bitch about someone getting food stamps... maybe you should go back to school for awhile so you can have a conversation with educated people.

Cost of tax havens broken down by state (based on Senate Report of $100B)
http://images.huffingtonpost.com/2009-04-14-taxes.png