President Obama announced a plan to close tax loopholes for companies who use “offshore tax shelters:”
President Barack Obama vowed Monday to "detect and pursue" U.S tax evaders and go after their offshore tax shelters. In announcing a series of steps aimed at overhauling the U.S. tax code, Obama 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 like 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.
Predictably, Republicans voiced their displeasure:
The White House will face opposition to the proposal from the business community and Congress. Before the announcement, a Republican leadership staffer circulated an email citing a Bloomberg report saying the proposal "would be the biggest tax increase on U.S. corporations since 1986." And Senate GOP leader Mitch McConnell (Ken.) said later on Monday that he could not endorse Obama's plan since it "gives preferential treatment to foreign companies at the expense of U.S.-based companies."
Prepare for the standard “Obama is taxing American business to death” attack. They’ll equate closing tax loopholes for companies that can afford to shelter their taxes in the Cayman Islands to taxes for all small business. They could also use the vague “raising taxes” phrase and imply that it’ll affect every taxpayer in America.
Don’t be fooled. This plan is to stop tax cheating corporations who hide their money overseas, at the expense this country and everybody in it. The talking points are coming. Be ready.