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. tv22

    Great, now following the law is bad in the Obama world.

    July 24, 2014 08:46 am at 8:46 am |
  2. Colin C

    Maybe the US should realize that a 35% tax rate on profit is rather steep. It is a disincentive to make more money when the government wants to take over a third of it away.

    July 24, 2014 08:47 am at 8:47 am |
  3. Steve

    I feel that any business that transpires in the US should be taxed – even if you are based out of another country. If it is done here, you pay taxes here.

    July 24, 2014 08:48 am at 8:48 am |
  4. LWJR

    Good issue. Legally not paying taxes=go to jail? Demonizing success is a hallmark of the Obama Admin. How about trying this Mr. Lenin....NO TAXES on US CORPS.

    July 24, 2014 08:48 am at 8:48 am |
  5. Kevin

    So, what does Democrat donors who own "green companies" that receive millions in government subsidies equate to...... domestic terrorism ?

    July 24, 2014 08:49 am at 8:49 am |
  6. carboncow

    There is nothing MORE American then rich people and corporations dodging taxes and going off shore!

    July 24, 2014 08:49 am at 8:49 am |
  7. robert

    Obama has lost his mind. Tax dodging is as American as apple pie, mom, and baseball. For god's sake, that's the whole rationale behind our founding. Just how our of touch with American is this man?

    July 24, 2014 08:50 am at 8:50 am |
  8. Anonymous

    The president needs to show these organizations that their tax dollars are being responsibly spent. That will get him his "economic patriotism" he so desperately wants. If the leadership in these corporations saw government as a tool to enhance their industry's future and the future of their children, they would be more apt to pay their taxes. All we hear in big business is that we are supposed to "do our fair share". I would be happy to do my fair share if the government did theirs.

    July 24, 2014 08:51 am at 8:51 am |
  9. Freebie

    Other than taxing hard working people and companies he does not have any agenda. His philosophy is redistribution of wealth. His friends in Hollywood should be taxed 80 percent.. Tax brackets at 55percent doesn't make any sense. Politicians who put high taxes on citizens are terrorists, terrorizing hardworking people.

    July 24, 2014 08:52 am at 8:52 am |
  10. Brent

    Ummmm, we fought a war of independence from Britain over a what 2-3% tax on tea? The entire whiskey rebellion fought over a tax on alcohol after that war? Prohibition bootleggers were arrest by revenue agents. Sorry Obama tax dogging IS about as American as it gets.

    July 24, 2014 08:52 am at 8:52 am |
  11. Joseph

    Obama cannot understand that the economy is global, if American firms have to pay extra taxes, their products cost more and business is lost. He should be exhorting employees to work harder to help their company.

    July 24, 2014 08:52 am at 8:52 am |
  12. rad666

    He is a hoot.

    July 24, 2014 08:52 am at 8:52 am |
  13. jhonnyausemkock

    I cannot believe this guy has the unmitigated GALL to refer to ANYONE as "un-American"! I think he may actually be a sociopath. Seriously.

    July 24, 2014 08:53 am at 8:53 am |
  14. Freddie

    Actually, the desire to avoid taxes is very much historically an American concept if you look back at events that led to the creation of the United States.

    July 24, 2014 08:53 am at 8:53 am |
  15. Tony Bartlett

    Maybe if Obama would stop disrespecting taxpayers by wasting tax dollars and living like king while citizens are victimized by his policies and inaction, there would be more willingness to stand by and just pay the outrageous taxes our bankrupt, inept government demands.

    July 24, 2014 08:54 am at 8:54 am |
  16. Kevin

    Even more inversions will happen if Democrats continue the threaten US companies. They are within their legal means to do all of this. The right thing to do is reform the tax code.

    July 24, 2014 08:54 am at 8:54 am |
  17. Miguel

    Un-American Barack – really?

    This money comes back to people like me in the form of dividends and capital gains which I pay taxes on.

    Now shall we discuss you patriotism Mr Command In Chief?

    July 24, 2014 08:54 am at 8:54 am |
  18. wowlfie

    For once Obama is right.

    July 24, 2014 08:55 am at 8:55 am |
  19. James Malenfant

    He is right. These companies are cheating all of us, by not paying their fair share. If they don't like our tax rates, they should move overseas all together. We need to close the loopholes that allows these treasonous actions by these companies. I am boycotting them as much as I can. I already will never buy anything from Apple as it is now. Have a great day!

    July 24, 2014 08:55 am at 8:55 am |
  20. Farrok

    Coporations are no longer good Citizens but bands of rouges and thieves who care little about America. Now couple that with an America with a border and you have a recipe for disaster and collapse. An overwhelming influx of people, a collapse of the tax base and a nation without a border is a failed state.

    I as an American have no idea why our government allows these actions. It's as if America is tired of living and is being driven to collapse by powers or people unknown.

    July 24, 2014 08:55 am at 8:55 am |
  21. more2bits

    For once in a blue moon Obama is right.

    July 24, 2014 08:55 am at 8:55 am |
  22. jp1970

    Interesting note: The USA tax laws are tougher on citizens living overseas, than on coporations hiding overseas. The USA is 1 of only 2 countries that tax their citizens who are living overseas. Almost no other country on Earth taxes their citizens living overseas. The IRS is coming after us, but leaves the coporations alone. Just another reason I want to renounce my citizenship and never return to the USA.

    July 24, 2014 08:56 am at 8:56 am |
  23. Ken

    How about some examples of the worst offenders? Apple, America's darling for starters.

    These tax evading corporations need to be exposed, and Americans need to boycott their products until they pay their fair share in taxes.

    July 24, 2014 08:56 am at 8:56 am |
  24. sdas

    Ok now fix it. Make it A.Cheaper to have a bushiness in America or B.Close those loopholes and make them suffer.

    July 24, 2014 08:56 am at 8:56 am |
  25. Jan Nappylotto

    Why not renounce your citizenship and come back into the country as an Illegal Immigrant?
    – Tax-paid food
    – Tax-paid healthcare
    – Tax-paid education

    Let those US Citizens be played as fools and let them pay the tab. Take advantage of the gifts Obama has promised illegal immigrants.

    July 24, 2014 08:56 am at 8:56 am |
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