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.”
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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.
It's unamerican to use the law in such a way as to maximize your own benefit? Really? I do the same thing when filing my taxes every year. I assume Big O's accountant tries to minimize his total payments as well. Obama is such a tool to demonize corporations and people for doing the legal and prudent thing. If he doesn't like it then he can work to motivate changes to the law, but otherwise he should keep his trap shut.
Ok this is the most unamerican statement I've ever heard from the lips of a sitting US President. Barrack our time together needs to come to a quick end, 2016 couldn't come quick enough.
For the GOP tax avoidance has become a sport. If companies do business in America they need to pay taxes in America. By evading taxes they are just shifiting the burden to the middle class and other companies. And we wonder why our infrastructure is crumbling and education is running out of money.
So is living on welfare when you are able bodied or illegally crossing the border and live here illegally.
unObama maybe, but then aren't most of us? He could use those taxes to keep up his extravagant lifestyle.
No one should comment until they have read the 74,000+ page tax-code.
Good luck, but just see how quickly the GOP disrupts the process to protect their real masters- big business,
Why in the world the average American would vote GOP and in doing so allow big business to suck more out of us is beyond me.
from a news report:
West Virginia democrat Sen. Joe Manchin finds himself in the uncomfortable position of opposing what his own daughter did. Manchin’s daughter is Heather Bresch, the CEO of a generic drug firm called Mylan that makes big bucks from Medicare and Medicaid. Last week, the company announced that it was renouncing its status as an American company and would be incorporated in the Netherlands. In other words, it would still be a U.S. company and milk the U.S. market, but avoid a whole lot of taxes.
Don't hold your breath for Obama to start naming names!
I reckon that includes DEMOCRAT Joe Mankin's daughter who is moving her company to NORWAY.
If they move their taxes why not take away their US patent rights and TM's and allow new competitors to step up that will appreciate the USA marketplace and all it brings with it.
So Bill Clinton's pardoning of Mark Rich was un-American then?
Hey Tax Evading American: I reckon that includes DEMOCRAT Joe Mankin's daughter who is moving her company to NORWAY.
He's right. These firms and wealthy folks do it because they don't want to pay ANYTHING, not because they think they pay too much. The latter excuse is nothing but a smokescreen and it smells like farts. They use it because they've been able to arrange for taxes to feel onerous for the middle class....decades of stagnant wages and redistribution of wealth upwards make the lowest tax rates in decades feel like a heavy burden for hardworking blue collar 'Murikans....so they're able to drum up support for their own whining because most people have trouble seeing beyond their own experiences and it's very easy for them to attribute their own feelings to others. Well, newsflash: rich people and billion dollar corporations are not "hurting" when they pay a lesser tax rate than you do and their growth is not being hampered by paying lesser tax rates than you do while their stockholders and owners and executives take home 8 figure salaries. They're siphoning off the nation's wealth and economic stability to redistribute it to a very few and their message is clear: if you want the jobs and money to come back to 'Murika, you're going to have to let us pay and treat you like Chinese/Indian labor.
Scrappylike, look up the definition for redundant. Why do you want another IRS? The best solution is to revamp the U.S. income tax system, getting rid of most deductions, including the mortgage deduction which only benefits those people who can itemize, credits and loopholes. That way, the top tax rates would be lowered considerably for both real people and businesses. I think each actual person (not a fake, Supreme Court person), should get a $10,000 personal exemption. For example, a couple would get their first $20,000 in income tax free each year. If they had two kids, it would be the first $40,000. After that, pay a flat tax.
Why punish companies that do that when our loser president has money over seas to avoid taxes he is unamerican then anyone. He raised our debt more than any president so I guess he's unamerican and unpatriotic. We have the highest tax rate for companies in the world.
Its not tax dodging if it is legal. To move your assets around legally to utilize tax breaks is being intelligent, not unAmerican. Every American that does not like companies doing legal moves to pay less taxes better not be using tax deduction moves themselves, that is being a hypocrite. We are all equal under the law, what is morally good for one is morally good for all.
The sad part is the unintelligent have not figured out these legal tax moves are available to all, not just the rich and companies. Don't be mad at them for being smart, be mad at yourself for being stupid.
Tax avoidance is un-American.
War is peace.
Freedom is slavery.
Ignorance is strength.
We've always been at war with Eastasia.
I get such a kick out of the right wing extremists who keep spouting their little "their stealing from us by getting care approved by Congress." Let's see how these rich jerks survive with no jobs; no help; and, a pig headed right winger telling them they are no good! It's the right wing that will be the destruction of this country and it's time to stand up and kick them out of office and out of a party!
All animals are equal, but some animals are more equal than others.
Tommy, bye then, you want to compete with Indonesia? Look how well that worked with Mexico, no, there are other ways.
getting 100% tax returns at the end of the year because you did not make enough taxable income is very very different than not paying taxes. It still greases the wheels, the money still does it work in the system, still creates positive revenue for the country. This '47% of people dont pay ANY TAXES' is a flat out lie.
Off shoring your company to avoid paying into the system should void all your american patents and copyrights that protect your products, should cause your products to be taxed as imports to pay for the shipping infrastructure you are utilizing. Go ahead and take your company elsewhere, America should clear away any protections it provides you, and let the free market really work. Upstarts would be clamoring to fill the voids. It would be the most American response to off shoring these companies.
"perhaps if the criminal IRS is made redundant and a fair tax imposed, then all would pay."
LOL. Are you on bath salts? The wealthy and giant corporations would find ways around even that. Get it through your skulls: it's not that they don't want to pay AS MUCH as they're supposed and need to pay in order to make the country function...it's that they want to pay NOTHING and they have the power to arrange for that to happen.
Does that include GE, a company his pal owns?
With any luck, we can scare off these corporations and jobs for good. The U.S. takes in plenty of money in taxes. It's the spending that needs to be reviewed.
Fair is Fair
@Fair – A flat tax that removes all loopholes would work...
Sure. How about a flat tax of 50%? Would that work for you? See how that works. It's not a flat tax that you want. It's a tax CUT that you THINK you will get if there's a flat tax.
Wrong. A flat tax would reduce the insane buraucracy at the IRS, would make sure that some of the largest corporations in this country pay SOMETHING (think GE with $14 Billion in profits that didn't pay a thin dime), would allow the average American to file by themself, and maybe, just maybe, reduce the percentage of those individuals paying absolutely NOTHING to something less than 49%.
Republicans abandoned flat tax rates in favor our current progressive system a long time ago. But, please explain to the class how changing future tax rates solves the problem of taxes not paid on past profits.
What on God's Earth are you rambling about?
Progressive tax rates have been in effect since the income tax was put in place in 1913.
And who said anything about paying taxes on past profits? I used GE as an example of a corporation who paid zilch on $14 Billion in profits and that a flat tax would prevent from happening.