President Obama announced Monday a series of significant changes to the international tax system starting a major fight with U.S. businesses.
The proposals put some detail on a frequent applause line that Obama uses in which he pledges to end tax breaks that ship our jobs overseas."
Until now that was as detailed as the president had gotten save for a $210 billion revenue-raising line item in his budget outline.
Calling the tax code broken Obama said some individuals and corporations are shirking their responsibilities and called his proposal a down payment" on a broader remake of the tax code.
Its a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share" he said.
The administrations plan which raises $198.3 billion over 10 years is likely to meet with fervent opposition from the business community and skepticism from business-friendly Democrats in Congress. Obama wants action quickly; the administration said it wants to move bipartisan legislation in the next few months.
The international tax provisions being proposed by the administration will make the U.S. more of an outlier on international taxes than it currently is" said Catherine Schultz vice president for tax policy at the National Foreign Trade Council. The U.S. has the second highest tax rate in the world and these provisions will significantly increase the tax costs on global companies with U.S. headquarters."
The largest change would alter the so-called check-the-box" rules that allow companies to elect how some of their foreign subsidiaries are treated for tax purposes. This change which the administration had not signaled in advance would take effect in 2011 and raise an estimated $86.5 billion over 10 years.
According to an administration summary these rules allow companies to shift income from one foreign subsidiary to one in a low-tax country and avoid U.S. taxes. The administration would require some of these subsidiaries to be taxed as separate corporations.
President Obama announced Monday a series of significant changes to the international tax system starting a major fight with U.S. businesses.
The proposals put some detail on a frequent applause line that Obama uses in which he pledges to end tax breaks that ship our jobs overseas."
Until now that was as detailed as the president had gotten save for a $210 billion revenue-raising line item in his budget outline.
Calling the tax code broken Obama said some individuals and corporations are shirking their responsibilities and called his proposal a down payment" on a broader remake of the tax code.
Its a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share" he said.
The administrations plan which raises $198.3 billion over 10 years is likely to meet with fervent opposition from the business community and skepticism from business-friendly Democrats in Congress. Obama wants action quickly; the administration said it wants to move bipartisan legislation in the next few months.
The international tax provisions being proposed by the administration will make the U.S. more of an outlier on international taxes than it currently is" said Catherine Schultz vice president for tax policy at the National Foreign Trade Council. The U.S. has the second highest tax rate in the world and these provisions will significantly increase the tax costs on global companies with U.S. headquarters."
The largest change would alter the so-called check-the-box" rules that allow companies to elect how some of their foreign subsidiaries are treated for tax purposes. This change which the administration had not signaled in advance would take effect in 2011 and raise an estimated $86.5 billion over 10 years.
According to an administration summary these rules allow companies to shift income from one foreign subsidiary to one in a low-tax country and avoid U.S. taxes. The administration would require some of these subsidiaries to be taxed as separate corporations.
