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. Brett

    No sir, they are "voting with their feet", which, if you had been raised in this country, you would know is =very= American.

    When people (or companies) "vote with their feet" they are sending a clear and un-ambiguous message. Pity you are not listening.

    July 24, 2014 11:00 am at 11:00 am |
  2. jkrush

    Just another distraction from the real problems from the amateur-in-chief. Hasn't anyone looked at the where the laws with the tax loop holes came from? CONGRESS! And who's had control of Congress more often than not over the past two decades? That's right, the President's own party. The problem is bigger: it's both parties. I don't want to give these irresponsible fools any more tax money so that they can waste it on lobster and champagne penthouse suites for the GSA, a couple billion each year in aid to our enemies in Afghanistan, Pakistan, Egypt, and Palestine. All the while, our own citizens, especially the most vulnerable, go to be hungry, filthy, and unsafe.

    July 24, 2014 11:02 am at 11:02 am |
  3. davecu

    "Obama: Tax avoidance akin to renouncing citizenship"

    Why not COMPLETELY separate the can-do companies from the land of the do-nots.
    Send the industrious and successful wage payers out of our land of oppressive tax burdens..

    Guess who will make up the difference in revenues from every one of your "accomplishments".
    Of course, Joe Six-Pack, as always!

    July 24, 2014 11:03 am at 11:03 am |
  4. bobo

    You must pay the State. The State owns you!

    July 24, 2014 11:03 am at 11:03 am |
  5. IZSM

    OR....just a thought here, maybe before admonishing business owners who use the law to legally protect their companies from over regulation/taxation by the U.S. government, Obama et al should make the U.S. more business friendly, you see that is where JOBS and TAXES come from, the government doesn't 'create' anything, aside from rather warm drafts from time to time. Additionally possibly Obama might want to either appoint or hire staff or cabinet members who actually report their income and pay their taxes!...just a thought. enjoy!

    July 24, 2014 11:04 am at 11:04 am |
  6. MikeRight

    Really? Nothing about Democratic Senator Joe Manchin's daughter's drug company, of which she is CEO, leaving the U.S. to incorporate in the Netherlands in order to avoid taxes?

    Hmm...seems pretty relevant when the President is calling it un-American.

    July 24, 2014 11:06 am at 11:06 am |
  7. Sean T

    Wow....dangerous rhetoric from a very rich man in power.

    Don't blame the citizens, blame the fact that you HAVE LOOPHOLES to begin with and work on the disaster of a tax code we have.

    I absolutely cannot wait until this man is no longer President of this country.

    July 24, 2014 11:06 am at 11:06 am |
  8. Sniffit

    "Ok this is the most unamerican statement I've ever heard from the lips of a sitting US President."

    Really? "Taking your money and jobs and what should be your contributions to America's economy and financial well-being and ability to function out of the country is essentially writing off your own citizenship" is somehow an un-American statement to you? Interesting. Reality: our country is based entirely on the idea of a social contract and these people think they should be and are exempt and that they owe nothing to the rest of society for what they have and enjoy. They threw a fit when people pointed out that they didn't just get rich or grow a large successful corporation in a giant governmental and societal vacuum...and they run their corporations as if the billions being made every year are all their personal doing, which is how they justify in their minds their consistent devaluation and refusal to fairly compensate and recognize their employees' contributions for "building that" on their behalf. They're sick, selfish, self-centered megalomaniacs with grossly inflated senses of entitlement, and nonsense like we've heard over the past few months, like suggestions that wealth should equate with more votes (and vice versa) prove it.

    July 24, 2014 11:07 am at 11:07 am |
  9. oldguy68

    What a hypocrite. His team criticizes Romney for not paying taxes and then when it turns out Romney paid MORE than the law required he says nothing
    Everyone should pay what the law requires and no more. This isn't dodging.He had the chance to rewrite the tax code his first two years but didn't do anything. Might have offended Soros

    July 24, 2014 11:07 am at 11:07 am |
  10. Tom l

    Rudy has officially jumped the shark. He offers no relevant information and has no desire for conversation. He just wants to talk about the liberal agenda and what is best for it. He has no desire to seek common ground and is only interested in spewing his talking points day in and day out.

    On the other hand, I have noticed a change in tone and content with the Real TP over recent days and I think it's awesome.

    July 24, 2014 11:07 am at 11:07 am |
  11. IZSM

    Pot..kettle...pot...kettle?

    July 24, 2014 11:07 am at 11:07 am |
  12. Whitney

    It makes me laugh to see that there are people in our society that think they are SO IMPORTANT that they need to try and pay the least amount of taxes on their individual incomes! Get real; the companies that find these loop holes wouldn't even look at you because the amount of your income compared to theirs is chump change. If it makes you feel better to think that you are in anyway comparable to BIG BUSINESS, go fo it, but you are laughable!

    July 24, 2014 11:08 am at 11:08 am |
  13. Sniffit

    Brass tacks: They believe wealth = an exemption from America's social contract.

    July 24, 2014 11:08 am at 11:08 am |
  14. Realityblowz

    Too funny. It was just reported today that Democrat Senator Joe Manchin’s daughter who owns a Big Pharma company called Mylan, that makes big cash from American Medicare and Medicade, is moving the company headquarters to the Netherlands to avoid America's taxes, while still taking Americas money. Her name is Heather Bresch.
    With a Democrat Senators own daughter doing this, I ask how this is supposed to help the Democrats?

    July 24, 2014 11:10 am at 11:10 am |
  15. Sniffit

    "Nothing about Democratic Senator Joe Manchin's daughter's drug company, of which she is CEO, leaving the U.S. to incorporate in the Netherlands in order to avoid taxes?"

    What do his adult daughter's decisions and behavior have to do with Sen. Manchin personally, and even more important, what relevance do they have to what Obama said? Nothing. If what you say is true, then her company falls squarely into what he's saying and there's nothing whatsoever about what he said that exempted her or that company from his criticism.

    July 24, 2014 11:11 am at 11:11 am |
  16. Ed

    Does that include IRS employees and your own administration staff?

    July 24, 2014 11:12 am at 11:12 am |
  17. JJR

    That'll work Obama. Remove the businesses that employ real citizens. Then everyone will be a government teat sucker.

    July 24, 2014 11:12 am at 11:12 am |
  18. yippeeskip

    Okay...when are you leaving???

    July 24, 2014 11:13 am at 11:13 am |
  19. Longtimer

    Guest

    Obama is the one who is un-American.
    ____________________
    BIRTHER Alert! BIRTHER Alert!

    July 24, 2014 11:13 am at 11:13 am |
  20. Steve

    It is only un-American when it is someone else besides the companies that contribute to their party. Make it easier for them to stay. You get more jobs and more tax revenue when they are here.

    July 24, 2014 11:14 am at 11:14 am |
  21. Sniffit

    "Hmm...seems pretty relevant when the President is calling it un-American.

    Why? Explain yourself. Obama is not responsible for her and nothing he said would exclude her or that company from the criticism he levied. Moreover, you can't attribute that company's behavior or her decisions to either her father or Obama such that you can claim there's any hypocrisy on their parts as a result of what that company is doing. They don't control her or that company. Nothing Obama said exempts her or that company from the criticism. Or are we talking some grand conspiracy here in which they do have that control? Or even better, is it because she's a woman and therefore you don't view her as an independent self-determining entity?

    July 24, 2014 11:14 am at 11:14 am |
  22. FLIndy

    From the comments of those who disagree with the President and are siding with the corporations it has become abundantly clear that their hatred for THIS president has clouded any sense they may have had. How anyone in their right mind can agree that U.S. corporations should not have to pay their fair share in taxes to help our country is beyond belief. Remember, the CEOs of most of these companies make exhorbitant amounts of money and most of the workers are just trying to get by with the small wages they are paid. You are the people that these corporations and the Republican party count on to keep duping into voting for their interests, not yours. The President has said before that the loopholes need to be eliminated and the tax rate cut but the Repubs/Tea Partiers in the House will not do ANYTHING this President wants to accomplish. I heard one of them on C-Span this morning yapping again how the President won't work with them – it is getting very old and all they are really saying is that he won't do what we, the MINORITY, want. They don't believe in democracy and that is more telling every day!!

    July 24, 2014 11:15 am at 11:15 am |
  23. Rudy NYC

    Tax Evading Americans (Tea Party)

    For the GOP tax avoidance has become a sport. ... .... ....
    -----------------------------
    LOL "Tax Evading Americans". I love it, and I'm gonna borrow it .. .. a whole lot!

    July 24, 2014 11:16 am at 11:16 am |
  24. Put America First

    Does that mean that Obama is unAmerican for using loopholes to avoid paying taxes? Obama has it wrong. Competition is American and other countries are making better choices than we are when it comes to attracting businesses.

    July 24, 2014 11:18 am at 11:18 am |
  25. Longtimer

    Danny Boy

    I disagree Mr. President. America is about freedom. Freedom to disagree, freedom to act, react, freedom to stand out from the common drone. I don't have to support the laws passed by Congress just like I don't have to support the troops fighting in a war I don't agree with. I am not suggesting do anything illegal, but if the law allows Companies to continue to operate without paying taxes, then what do you expect? Congress needs to re-evaluate the laws put in place.
    ++++++++++++++++++++++
    Unfortunately, the GOP-controlled House of Representatives would much rather keep things as they are- they like economic mayhem, and they like giving corporations the right to move themselves and their jobs overseas. For the GOP it is "jobs,jobs,jobs"- in China. And that is what is un-American.

    July 24, 2014 11:20 am at 11:20 am |
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