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. Al

    It's funny he used the word CITIZENSHIP and not paying taxes. How many of the people that came to this country without proper permission are not paying their TAXES and should they be hit as hard as Obama wants to hit the companies that are paying a share of the tax burden. I guess he figured out that with all those people that are NOT CITIZENS being taken in that more money is needed to pay them off and provide them services that should only be offered to LEGAL CITIZENS.

    July 24, 2014 09:31 am at 9:31 am |
  2. RAB

    The man is clueless. It is Congress that passed the laws that allow corporations to take advantage of the tax breaks. They are the non-patriots, not the companies that are required to take advantage of these tax breaks in order to remain competitive. Obama is so illiterate when it comes to business principles.

    July 24, 2014 09:32 am at 9:32 am |
  3. MadmaxCA

    Companies such as Google, Apple, and GE are among the wealthiest corporations on the planet and they work very, very hard to avoid paying as many taxes as possible, leveraging every possible loophole they can create to in some instances avoid paying any corporate taxes whatsoever and then justifying such behavior by claiming they pay plenty of taxes in that the employees they pay for work are charged income tax. They give massive amounts of money to Obama and other liberals and you nary hear a peep from any on the left regarding how these corporations circumvent paying any taxes.

    July 24, 2014 09:33 am at 9:33 am |
  4. calvin

    Is this anything like letting illegal immigrants into this country Illegally? I GUESS THIS IS NOT AGAINST THE AMERICAN LAWS!!!

    July 24, 2014 09:33 am at 9:33 am |
  5. Rick

    It is Obama that is unamerican for taxing businesses so heavily that they must even CONSIDER leaving the country just to survive.

    July 24, 2014 09:33 am at 9:33 am |
  6. Marc L

    Obama's double standard is becoming laughable. He wants to talk about tax cheats being un-American? A simple google search reveals how many of his cabinet members and appointees are tax cheats, and thus must be un-American. Logically then, if we are to assume Obama means what he says, then he has no problem filling his government, the government of the United States, with un-Americans. Which must lead to the question then of how American is the President himself if he surrounds himself with people he considers un-American? I understand politicians double talk, it is the nature of being one. However, Obama's outright, blatant lies are just becoming downright insulting to our intelligence. And more astonishing is that too many people still find excuses to support him.

    July 24, 2014 09:33 am at 9:33 am |
  7. drowlord

    "What we need is a new sense of economic patriotism, where we all rise and fall together"

    This is pretty ripe coming from a Democrat who has no real position on millions and millions of people in the "subsistence class" that produces nothing and spends their life on public support.

    July 24, 2014 09:34 am at 9:34 am |
  8. Mark

    Ironically, it was the first Americans, whom protested, and avoided taxes, and founded a new country spurred by the overbearing taxes of another tyrant with no understanding, compassion or sympathy for the people or businesses he was taxing. Also, the 1860's southern Americans who decided to leave the union also spurred on by unfair export tariffs that threatened the agricultural society that they relied upon. History repeating itself? I'm not picking a side here. I'm just pointing out the historic correlations.

    July 24, 2014 09:35 am at 9:35 am |
  9. Tom

    What an idiot. Tax avoidance? That would be writing off your mortgage interest. He's so detached from reality he doesn't know the difference between avoidance and evasion.

    July 24, 2014 09:36 am at 9:36 am |
  10. MNClownfactory

    Calling on this Congress to do anything is a waste of time and tax payer money. This is the worst most anti-american congress this country has ever had. The Tea Party are a bunch of Nazi's trying to GIVE everything to business and take everything from people ( with the exception of forced Chrisitanity and mandatory gun ownership for all). They and the SCOTUS have already decided these corporations are people. Lets say if they don't pay taxes they cannot lobby or contribute to political campaigns as well. That might help balance things out. Otherwise charge them a VAT even if is mfg here and distritubted here.

    July 24, 2014 09:37 am at 9:37 am |
  11. Tom

    No corporation ever pays a penny in tax. They collect it from their customers and pass it on to the corrupt federal government. Wake up people!

    July 24, 2014 09:37 am at 9:37 am |
  12. Anonymous

    But it ok for all the illegals? He is a total fool. The companies will just move everything-including jobs oversees!!

    July 24, 2014 09:38 am at 9:38 am |
  13. Fair is Fair

    A flat tax that removes all loopholes would work...

    July 24, 2014 09:38 am at 9:38 am |
  14. dirtybird

    Capital flight is a common symptom of Leftist governance. Under Leftist policies, the business environment becomes intolerable and businessmen start to look for solutions overseas. It's a common theme not just in the USA, but throughout the world that when Leftists are in charge of government, many people start to look for ways to leave the country to protect their wealth. It happened in France when Miterrand became president in the 80s. It is happening now in the US.

    Leftists often employ draconian methods to attempt to stop the flight of capital and people from their rule. That is what the Berlin Wall was all about.

    One of the key differences between Leftists and Conservatives is that Leftists build walls to keep people in, while Conservatives build walls to keep people out.

    Face it, when Leftists are in charge of your government, the citizenry become prisoners.

    July 24, 2014 09:38 am at 9:38 am |
  15. tidho

    Legal beharvior should not be subject to name calling by the President of the United States. THAT is un-American.

    July 24, 2014 09:39 am at 9:39 am |
  16. Obama is a Genius!

    Obama Strategy:
    – Raise Taxes to pay for parasitic constituents of the Democratic Party.
    – Call anybody that objects Un-American
    – Spend the majority of his time in office fundraising
    – Fill in the other time with lies about signature programs, using government to target political opponents, fanning the flames of racism, dividing the country, promoting job-killing policies, diminishing America's influence on the world stage, covering up scandals, eliminating border security, creating more debt than all previous presidents combined, milking the perks of office with golf and vacations, and blaming others for his failures. After this, he calls others un-American. Priceless.

    July 24, 2014 09:40 am at 9:40 am |
  17. Rudy NYC

    George

    I get that this makes people upset – but how does this make them "un american"? Ikea doesnt pay taxes like the US companies do because it is foreign – and somehow we think (under the presidents logic) that foreign firms should get treatment under the tax laws that our own companies dont get? ... ... ....
    -----------------------
    Honestly, I don't think ;you know jack diddly-squat about Ikea's taxes, no more than I do. If you think that Ikea doesn't pay any taxes to the U.S., then let me remind that import tariffs are taxes, too. Now, what were you saying?

    July 24, 2014 09:41 am at 9:41 am |
  18. McRCN

    Congress makes the rules, so you cannot complain about people following the rules.

    July 24, 2014 09:43 am at 9:43 am |
  19. critical thinking

    Most uniformed people don't realize that corporate tax is a pass through expense, meaning that like other expenses including payroll, utilities, benefits are passed onto the final consumer in the form of price. So all you who want higher taxes for corporations are basically voting for higher prices for yourself. If there were lower corporate taxes, more companies would come to the United States, not leave. More companies would need to then hire more people in the United States. More people hired would then be paying federal income tax and not taking money from the Federal Gov't, which by the way is all of your money that you send to DC. Companies would be more profitable which means their stock prices will rise, meaning your 401K would be worth more and for those who invest would then pay a capital gains tax on that profit. But that is far too complicated to understand so the President simple says; you are un-American.

    July 24, 2014 09:43 am at 9:43 am |
  20. mrkhrrs

    I reject Obama's definition of what is or is not American.

    July 24, 2014 09:43 am at 9:43 am |
  21. pjoe

    Using LEGAL loopholes is not "tax avoidance" ... it's following the insanely complex 74,000+ page American tax code.

    On the other hand ... maybe, just maybe, we should (ahem ... forgive the shouting) THROW AWAY THE INSANELY COMPLEX TAX CODE and start over with something not written over the years by a bunch of lobbyists paying off politicians?

    July 24, 2014 09:44 am at 9:44 am |
  22. joe

    More phony issues. He spent the first 4 years screaming about raising taxes on the rich. A whopping total of $64 billion in added revenue against deficits of over $1 trillion. Then we had the phony war on women. Now this one.

    The problem is not with corporations. It is with a US tax code that is not competitive with the rest of the world. I worked in China for 10 years. When we brought in expats we would provide housing, car, travel to home country, benefits and pay. The Europeans only paid Chinese tax and there was none on the car, house, or travel. The US government would tax everything on top of what the Chinese taxes. A European would cost $150,000 all in. A US citizen would cost $300,000. We hired mostly Europeans.

    The corporate tax is the same way. You want to do business globally and compete with foreign firms. Being from the US is a big disadvantage.

    July 24, 2014 09:44 am at 9:44 am |
  23. TSB8C

    These companies are not "cheats" when they use perfectly legal tax rules to save on taxes. I agree that the tax code is a mess with too many loopholes, special perks for select industries, special deductions for government approved behavior, etc. So fix the tax code. But to claim that companies are "unamerican" or are "cheats" because they use perfectly legal means to increase profits and make more money for their shareholders (which includes many middle-class people with 401K's and other investments) is no more unamerican than any individual citizen that takes full advantage of every tax deduction they can legally claim on their own returns (which Obama himself also does).

    July 24, 2014 09:45 am at 9:45 am |
  24. JPerez

    So is your overtaxation unAmerican. So is your Democratcare (Obamacare) unAmerican. So are your Socialist views unAmerican.

    July 24, 2014 09:45 am at 9:45 am |
  25. Guest

    Obama is un-American. He is refusing to protect our country.

    July 24, 2014 09:45 am at 9:45 am |
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