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 tax 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 Barack 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 dollars 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 dollars 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 includes the IRS hiring almost 800 new 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 ... "
Yes!!! This is change I can believe in!
HIGHER-LEVEL PROFESSIONALS....OBAMA WILL CAUSE YOU TO LOSE YOUR JOB.......
Some how, the incompetent elect, thinks this will bring jobs back to the US...by punishing companies who send some of their manufacturing or servicing over seas.
NOPE – here's what's going to happen. The board of directors of these companies can EASILY relocate the company HQ from the US to a more tax friendly country. Moving HQ's would be cake compared to moving manufacturing, which in most cases is already in China.....Problem solved. With a global economy, why not? Some developing nation like Costa Rica will welcome such headquarters with open arms...wooosh....that's the sound of thousands more american jobs going overseas. Now, we'll have they're empty HQ buildings and facilities to deal with as well....retail mortgage defaults....no, this administration will continue to contribute to the total downfall of the country. I firmly believe that Obama, being Anti-American to the core, is after the Bill of Rights, Constitution and any other governing document that has established the American way...
"Progressive," the libs like to call it. Well, they need to read a history book....Obama's creating one big nanny-state, while driving viable industry out of business, to within government control, or leaving the country...there go your jobs, libs, (if you have one)....wow...sounds like the USSR....oops, I forgot, most of you young obama supporters are too young to remember the USSR, or too uneducated......Well, you whiny libs can't blame GW or Cheney for that; that's all OBama, Pelosi, Reid...Dodd.....Kennedy.....the perfect storm..
........Obama Change ! Obama Hope! Obama inexperience and endangerment to the country!
Boy...Wall Street isn't going to like this one! I can hear them screaming already...
So the government gets richer and the people get porer. So much for, I will not increase taxes.
The only way Obama's budget works out is if things go perfect in Iraq, Afghanistan and Pakistan. Since they are not Obama is using your money as a supplemental income to fund his budget. Before all you dems start with all the last 8 crap, I would like to point out that bush would do the same thing. Obama was supposed to be for change remember. I remember when all you dems were hear saying when obama takes control everything will be better. Well nothing is, not any of the wars, not any of the economic issues, we are all paying more in taxes ,clearly our national security is not good considering we are in a state of emergency right now, and the rest of the world hates us still. Now they think we are a joke because our president calls us arrogant and you dems think that is a good thing.
Thank God!!! For all the critics of Obama. He has followed up on every promise of his campaign. The days of the the "suits" creating loop holes for themselves and friends are over. I'm sure the party of no will even criticize this. But I'm not sure how.
Kudos to "O"
Great, now he is chasing international firms out of the US, and making it harder for US based firms to compete internationally, not to mention the trade war type effect this will have on competition.
This man is brilliant, and in the brilliance you get when you wash your fine china in lemon-fresh joy. All sparkle.
OUTSTANDING! Way to go, President Obama.
I'm going to have to go and buy some ear plugs b/c the GOP is going to start screaming and whining even louder.
"Class Warfare" and other phrases like "socalist/marxist/communists" are going to be heard through the airwaves in 3, 2, 1....
Good job Obama, again.
This means that jobs won't be outsourced as much? We can keep jobs here in the U.S.? We can put people back to work instead of shipping customer service jobs to India?
That puts people to work right here in the States, puts money back into the economy, and stops the flagrant dismissal of employees due to employers outsourcing jobs.
So many of us out here in the workforce have been against outsourcing for years because we've watched our friends and ourselves become unemployed due to someone somewhere else getting our jobs.
About time someone did something about this.
All I can say to this is....ITS ABOUT TIME
End tax breaks for companies that ship jobs overseas (That was an Obama Campaign promise)
And while you're at it, stop bringing in tens of thousands of foreigners from overseas every year who come here to take our jobs, especially when so many of us who were born here don't have jobs now!
It's about time. And, I look forward to the spin by the Neocons on how this is bad for business, when actually it's only bad for overpaid, underperforming CEO's and the like.
As always Mr. President you're doing a great job! Its about time someone address that problem of tax loopholes. But wait, want the Republicans accuse you of doing too much again. Don't worry another 2-3 years hopefully they wil be like dinosaurs. LOVE YOU! !!!!!!!!!!
Finally something that makes sense!!!!!!!!!!!!!
Oh boy, wait until the Republican "Club for Growth" types get ahold of this. They hate to see corporations or the rich pay their fair share of taxes and would rather stick it to working men and women because they continue to operate under the dual delusions that supply side economics ala Ronald Reagan actually benefitted everyone and that giving a tax break to those who don't need it will "trickle down" to the little guy. They conveniently forgot to factor in greed, which is what the GOP really stands for.
Be advised that the "Just say NO!" republicants and blue-dog democraps are gonna scream bloody murder over this.
Those politicans who are nothing more than bought and paid for puppets of rich folks and big multi-nationals are gonna throw every scare tactic they have at attemps to balance the playing field a little towards keeping jobs and fair taxes in the US.
Film of mass hysteria and predictions of the end of the world at 11....
We could use a nice revamp of our current domestic tax code while we're at it.
now i REALLY want to hear from those republicans like russ limpballs and lou dobber down. this should have been done 100 years ago. IF the rich had done, if the far out of it right would have done, what the Bible says and that is to take care of the sick, the poor,widows,etc- nobody would be interested. These ME ME ME far right babies need their M taken away–milk and money.
Ha, ha. Is Obama going to start by demanding that Charlie Rangel pay his taxes? Or is Charlie Rangel going to write a special exemption for himself into the tax code?
Does this mean jobs will come back home to the U.S. instead of being outsourced????
Dwight it's not cheaper to move your entire business overseas.
Additionaly it's not thuggish to close loopholes for tax evasion...it's thuggish to allow businesses to screw the American public by hiding behind GOP tax codes. Get a clue.
Why should the working class pay taxes for roads, schools, welfare to the rich corporations. It's about time that the People are in control of this country, not the rich corporations who for the past eight years were in bed with the government, who basically told the tax payer, "Let them eat cake.:"
Thank you President Obama ,it's about time they close loopholes for overseas tax havens and end tax incentives for creating jobs overseas. A lot of company have there main headquarter overseas. Go President Obama.
This is all fine and good, but the reality is that big businesses and rich people who have overseas accounts will simply find another way around whatever law is put in place to close the loopholes. Businesses and people who are trying to get around paying taxes, will find a way to do it. Though I think the gov't should try to stop it, the reality is that it is going to cost a lot of money to crackdown on big business and rich people. Not sure this will be quite the boon of income they are projecting.
Wouldn't it be nice if the gov't would just cut spending? All of us normal citizens are having to do that right now, so it would be nice if the gov't would make some real strides to do the same, instead of passing huge deficit budgets.
Once again Obama is concerned about hurting private business through taxing which will result in layoffs. See what happens when you elect someone with no private business experience and has been on he reliant on taxpayers his whole life.=HIGHER TAXES
I am GOP supporter and small business owner.
I support on this issue OBAMA 110%. US companies that sell their goods here in US should pay taxes here, and keep jobs here.
As a business owner, I do not mind paying higher tax as long as it is not being misused, and I do not think its going to be.
I support our President in this issue.