Obama offers populist message on corporate taxes at end of fundraising trip
July 24th, 2014
06:25 PM ET
5 years ago

Obama offers populist message on corporate taxes at end of fundraising trip

Los Angeles (CNN) – Ramping up his populist economic message as midterm elections near, President Barack Obama on Thursday singled out large companies that maneuver through legal loopholes to avoid paying U.S. taxes as “corporate deserters.”

Those firms have effectively renounced any allegiance to their home country, Obama claimed during remarks at a community college here.

“You shouldn't get to call yourself an American company only when you want a handout from American taxpayers,” he said later, calling the practice, known as “inversion,” unpatriotic.

“I don’t care if it’s legal,” he said. “It’s wrong.”

Obama was touching on an issue Thursday that Democrats believe could help them win over voters in this year's midterm contests. The President has long decried the inherent unfairness in large, multimillion dollar corporations that operate chiefly in the United States but pay little in U.S. taxes. He used the issue to attack Republican Mitt Romney during the 2012 presidential campaign.

On Thursday he heightened his anger at the firms who take advantage of the legal practice, which officials say has led to $17 billion in revenue slip through the government’s fingers.

“You are just gaming the system,” he said of inverted companies during an interview with CNBC. “You are an American company, you continue to benefit in all kinds of ways from being an American company. It is true that there may be a lot of things that may be legal that probably aren't the right thing to do by the country.”

In the past decade, at least 47 U.S. companies have made the move to incorporate in nations with low corporate tax rates. Several inversions have been proposed this year and more are in the works.

Both Republicans and Democrats say the entire tax code needs an overhaul, but Obama is pressing lawmakers to take action now to prevent inversions. Administration officials say such a measure must retroactively bar any firm that moved abroad after May 2014 from enjoying lower tax liabilities.

They say such an inclusion would prevent a rush on inversions as a new law makes its way through Congress.

The White House has aimed this week to advance the President's economic agenda, focusing on jobs programs and the economy. Bolstering the middle class has formed much of Obama's midterm election year pitch, and Thursday’s event took on the air of a campaign rally, complete with an angry protester calling Obama the Antichrist.

But world events – including Israel's ground invasion of Gaza and furor over the downed airliner in Ukraine – have largely overshadowed the intended topics this week, despite the White House's attempts to highlight new job training measures.

Obama's remarks Thursday, which were delivered at a technical college in downtown Los Angeles, came at the end of a three-day fundraising swing that also brought him to Seattle and the Silicon Valley. The event was the only public showing for Obama during his stay on the West Coast.

He withstood some criticism for not canceling the trip, which aides countered by saying the President could conduct his job from anywhere. The White House did, however, nix an appearance on "Jimmy Kimmel Live," replacing the late night show with the more sober CNBC interview.

CNN Money's Jeanne Sahadi contributed to this report.


Filed under: Democrats • Economy • Jack Lew • President Obama • Republicans • Taxes • Treasury • Treasury Department • White House
soundoff (323 Responses)
  1. Guest

    Obama is the one who is un-American.

    July 24, 2014 10:32 am at 10:32 am |
  2. Big_D

    Obama should become the guy the GOP is afraid of. He isn't up for election and the GOP can be taken down with a populist that goes after the real inequities between rich and poor in the USA. Most of the poor in the USA still think they are middle class and that ended in 90.

    July 24, 2014 10:32 am at 10:32 am |
  3. lucky two

    DO business in the U.S. make large profits and pay no taxes. ,and they all themselves businessman. They are nothing but CROOKS/THIEVESB but yet the Republican /Tea party treat them as hero's >They should be shot for treason.

    July 24, 2014 10:32 am at 10:32 am |
  4. Josh

    That's nonsense – the US economy is capitalist-based, and the point of capitalism is to maximize profits. When there are legal loopholes to avoid taxes, then it's in every company's (and person's) best interest to make use of these strategies and pay the lowest amount of taxes possible. Don't make the excuse that this is "un-American" – if you want them to pay taxes then close the loopholes. The fact that the US has the highest corporate tax rate in the world probably isn't creating much of an incentive to "be American" anyway.

    July 24, 2014 10:32 am at 10:32 am |
  5. rconatser1

    It's a good move...but the GOP will fight it, because they are no more than prostitutes for the rich, as the NRA is the prostitute for the gun and ammo industry.

    July 24, 2014 10:32 am at 10:32 am |
  6. MM

    The government should be held accountable for its spending. Fraud, waste and abuse is rampant. Hold them to an actual budget.

    July 24, 2014 10:33 am at 10:33 am |
  7. Tom Bukowski

    Let these firms pay for, and conduct their own sealane protection. They seem to think our Navy is a charity.

    July 24, 2014 10:34 am at 10:34 am |
  8. critical thinking

    "To continue to take on more debt and pass it onto our kids, well that just un-American" Does that sound familiar Mr. President?

    Now that he has increased our debt to over $17,000,000,000,000,000 it is now un-American to pay what is required by the tax code. Well America you wanted this community organizer, now you get to live with this incompetent until 2016. Elections do have consequences, wise up next time.

    July 24, 2014 10:36 am at 10:36 am |
  9. pjoe

    LEGALLY avoiding taxes is un-American.

    ILLEGALLY crossing the border is American.

    July 24, 2014 10:36 am at 10:36 am |
  10. Lizzie

    I AM
    Isn't Halliburton in Dubai...right after Cheney left office he moved his headquarters there. He loves the USA.
    -- Halliburton being a multi national company, has it's MAIN headquarters in HOUSTON, TEXAS plus a second smaller one in Dubai.

    July 24, 2014 10:37 am at 10:37 am |
  11. Say WHAT???

    Since when did companies swear an allegiance to any country? Companies are owned by the shareholders and the companies are supposed to be run to maximize their return on investment. This is strictly about numbers. Companies and the people running them have a fiduciary responsibility to run them as best they can for the owners, NOT THE GOVERNMENT. If they maximized their tax burden, or paid more than they had to, they would be breaching their fiduciary responsibilities.

    As usual, Obama just doesn't get it. Can we PLEASE see his college grades?!

    July 24, 2014 10:37 am at 10:37 am |
  12. John S.

    Companies compete globally these days. The US corporate tax rate is one of the highest in the world. Forcing companies to operate under that tax rate makes them less able to compete against the rest of the field, so they become more likely to fold- which would reduce not only tax revenues, but also jobs and the overall economic strength of the US. Of course, all those things would happen after Obama is out of office, and he'd look good for the next 2.5 years, so it's easy to see why he's pushing for this policy.

    July 24, 2014 10:38 am at 10:38 am |
  13. bnb

    Stop generalizing, state which loopholes you are talking about. Propose changes to them, because that's your job. Stop campaigning and do your job.

    July 24, 2014 10:38 am at 10:38 am |
  14. john

    What more do you expect from someone who is intentionally destroying this country.

    July 24, 2014 10:39 am at 10:39 am |
  15. Tony

    Wasn't this country born from not wanting to pay egregious taxes (aka tea tax). Mr. President, mitigating ones taxes is smart and as American as apple pie. Go back to community organizing.

    July 24, 2014 10:39 am at 10:39 am |
  16. wallym

    All of a sudden these Corporations are American Citizens with a duty to their country?

    The reality is that it's a global economy. The US does not have 'dibs' on companies just because it's the US. If the US government thinks it can close tax loopholes and keep the companies, it should do that. But the US is competing for these companies with places that are probably happy to keep those loopholes open, and don't make them pay workers or give out healthcare. I don't condone that, it's just a reality.

    Poor and middle class people get confused about these things, because we're mostly stuck in America. America owns us. But people with money and companies can go wherever they want. Which is bad for us, because we rely on those people with money and companies to pay for everything and employ us.

    July 24, 2014 10:40 am at 10:40 am |
  17. Melli

    Obama is 100% CORRECT! These HUGE corporate tax loopholes cost Americans waaaaaaaaaaay more than poor welfare recipients. Yet people just want focus on attacking the poor, the immigrants, our veterans, our seniors, the middle class....everyone needs to be responsible for their fare share, except corporations?
    Let's get this straight...corporations are not people, they have no morals, and are the real culprits of the economic problems we're facing. Democrats and Republicans alike.

    July 24, 2014 10:40 am at 10:40 am |
  18. Jesse

    Hey Obama how about ban lobbyists from Washington. This is nothiing but hot air and propaganda. Obama would never be able to touch these businesses as they have lobbyists and lobbyists feed the political elections. This is just more rhetoric to split the country and divide through politics. To the morons who think Dems are better or different than Repubs, keep wearing those tin foil caps and pretending they are different. They all take the same money from the same lobbyists.

    July 24, 2014 10:41 am at 10:41 am |
  19. Victor

    I'm sure Obama is on the phone with the CEO of GE right now telling them to pay taxes....... Not.

    July 24, 2014 10:41 am at 10:41 am |
  20. Tony

    Wasn't this country born from not wanting to pay egregious taxes (aka tea tax).

    July 24, 2014 10:43 am at 10:43 am |
  21. pjoe

    GE ... big Obama campaign donor ... billions in profits ... and a huge tax avoider.

    July 24, 2014 10:43 am at 10:43 am |
  22. John Walsh

    How Dare Obama hurt them companies who payoff Congress !

    July 24, 2014 10:44 am at 10:44 am |
  23. jim b

    The CEO'S AND TOP MANAGEMENT of these companies should be expected to move their families to those countries. Anyone who seriously thinks big business should regulate itself is foolish. btw climate change deniers are in reality the folks who don't give a darn about the future generations. USA needs to tax gas more and rebuild infrastructure while reducing carbon emissions which will eventually destroy the planet.

    July 24, 2014 10:45 am at 10:45 am |
  24. Scrappyike

    perhaps if the criminal IRS is made redundant and a fair tax imposed, then all would pay. Nobody knows how the taxes are collected and tax code is gibberish.

    July 24, 2014 10:45 am at 10:45 am |
  25. Truth

    Yes tax dodging firms are un-American but so is the excessive taxes our citizens are paying for these wars, foreign aid, welfare, illlegal immigration.

    July 24, 2014 10:45 am at 10:45 am |
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