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. junior36

    Yea, but is it as un-American as someone who raises the Debt Ceiling (so identified by Senator Obama)?

    July 24, 2014 10:19 am at 10:19 am |
  2. Tommy G

    And just when you thought Obama couldn't get any more destructive or divisive to this country, he finds more ways to wreck this country and economy. Businesses are GLOBAL these days and have to think and compete GLOBALLY to survive. Obama, as clueless as ever, cares noting about reality, just how much money he can squeeze out of and take from people and companies.

    Companies, and people, are leaving the USA because of his destructive attacks and obvious desire to tax the hell out of everybody except his supporters. Does he think he can hold people and companies hostage? Obama's is totally clueless and out of touch with reality. Does this moron actually think people get up every morning thinking "Hmmmm... how can I maximize how much money I can make for the government today?"

    This clown should be impeached if this is what the next 2.5 years is going to be like. Can we really afford another 2.5 years of this nightmare?

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

    Nothing will change until we move to a flat tax or consumption tax, reduce the size and power of the IRS, which would also get rid of the Ways and Means Committee.

    The Ways and Means Committee has the power to alter the tax code. These are the corrupt bureaucrats that allow companies like GE to pay nothing in Federal Income Tax.

    July 24, 2014 10:20 am at 10:20 am |
  4. rikkirocket55

    "Any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one's taxes." – Judge Learned Hand

    July 24, 2014 10:21 am at 10:21 am |
  5. just asking

    well this is rather ironic.... he is the one that had jeffrey immelt, the ge ceo, on his glorious jobs council and ge wasn't paying any taxes! i guess that is ok if you are an obama supporter writing big fat contribution checks.

    July 24, 2014 10:22 am at 10:22 am |
  6. Walter

    Un-American NOW, but just wait till he's leaving office. He'll pardon a few Democrat tax cheats just like his Democrat predecessor, Bill Clinton, did.

    Legally avoiding taxes is EVIL and UN-AMERICAN - unless you're a big Democrat donor and you actually commit tax evasion. Then all is forgiven.

    July 24, 2014 10:22 am at 10:22 am |
  7. herbsuperb

    Hey dingus! If you would stop using THEIR hard earned money to fund your own political pet project that they don't want anything to do with, maybe they would stop trying to dodge taxes. If the government would stop wasting exhorbatant amounts of money on ridiculous and asinine nonsense, then people would be less likely to feel that they can spend it better, and do all they can (including spending a lot of money) to keep more of it themselves. Obama, you are not the victim here. They are. Clean up your rancid government, and stop wasting their money. When they can trust you and your ridiculous little party with it, then maybe you won't see this as often.

    July 24, 2014 10:23 am at 10:23 am |
  8. Big_D

    The president is 100% correct and every company that does this should be fined at a rate that is draconian and the people who do it should serve time.

    July 24, 2014 10:23 am at 10:23 am |
  9. Devils Advocate

    There is a way to get more tax money and reduce 'anchor' babies at the same time. It is a well know fact that any US citizen living in another country has to pay US income tax, why not extend this to all with dual citizen ship and living outside the US? This would also cut down on birth torisum

    July 24, 2014 10:23 am at 10:23 am |
  10. Big_D

    This is also why I don't buy Apple products.

    July 24, 2014 10:24 am at 10:24 am |
  11. lynn

    It is unamerican, going back to the days of our founders, George Washington led the army against citizens refusing to pay taxes.

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

    Will we
    Will we get to see Mitt Romney's citizenship papers (Tax returns) now?
    - why do you want to see his tax returns, do you want to know how many MILLIONS he gave to charity. Don't you think the IRS would have been on him like a fly on H..S, just because magic pants Harry Reid threw out accusations to deflect from himself and you believed EVERY word.

    July 24, 2014 10:24 am at 10:24 am |
  13. Nonymous

    Taxes are necessary but the US Gov. is stealing from our children and our lives. Thieves.

    July 24, 2014 10:24 am at 10:24 am |
  14. Big_D

    Republicans will defend the actions of those who have hurt our country most because they love money more than the USA. They don't get that without the USA being strong the money and the security to make money will be gone.

    July 24, 2014 10:25 am at 10:25 am |
  15. Ariel martinez

    Obama is starting to sound just like Maduro in Venezuela

    July 24, 2014 10:26 am at 10:26 am |
  16. Rudy NYC

    HenryMiller wrote:

    @JHL: "Other than tax avoidance, there is no other compelling reason that these companies do this."

    Over-regulation.
    ----------------------------
    Requiring companies to have safe working environments compells them to hide money off shore.

    Fair is Fair work:

    A flat tax that removes all loopholes would work...
    --------------------
    Letting people keep their Obamacare would work...

    July 24, 2014 10:26 am at 10:26 am |
  17. This Vote Counts

    I'd like to know which companies those are so I can boycott them and their products/services! And I suppose the GOP is up and fighting to support those traitor companies. More tax breaks for the wealthy individuals and companies.

    July 24, 2014 10:26 am at 10:26 am |
  18. rs

    citizenUSA

    Wll Mr. President, can you blame them? I'm not saying some could have other intentions for doing what they've done, but I guess if we made things easier for them they might not leave. It's a business move, nothing personal. Oddly though, when I think of an individual doing it, it seems a little selfish.
    ___________________________
    you're right at many levels, and perhaps its my age- but I recall when corporations were proud to be American-based. "Made-in-America" meant something, and our economic powerhouse was industry. I might be wrong on this point, but I believe corporations believed in America before their bottom line. Becoming rootless, international entities means they haven't be come Swiss or French or Chinese, but they simply no longer care or identify with where they are- and they apparently now only care about their profits, and not the nation that gives them space, protection and the ability to grow.

    July 24, 2014 10:29 am at 10:29 am |
  19. Toucan Sam

    well if they dont want to pay their taxes then we should not be sending our children to fight for their interests in other countries.

    July 24, 2014 10:29 am at 10:29 am |
  20. Rudy NYC

    Fair is Fair

    Sure

    @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.

    July 24, 2014 10:29 am at 10:29 am |
  21. Big_D

    The CEO's steal the pensions then they hide them overseas. Everyone knows it. I have been in far too many tech companies that have done this with our retirement. I could have retired already if I wasn't subsidizing CEOs and investment companies who steal our pensions with "cost cutting".

    July 24, 2014 10:29 am at 10:29 am |
  22. cae

    obama isn't stupid. it's all about pandering, no different than what elizabeth warren is doing, or rick perry. play to your base and you keep your power. deviate to actually get something done in a bipartisan way and you lose political capital. we're in a state of fear, and only the loudest and squeakiest wheels get noticed.

    this is like saying anyone takes a deduction for home mortgage interest is unamerican. or any business that deducts its expenses is unamerican. if you're utilizing existing tax law to your benefit, you're being smart, not unamerican.

    July 24, 2014 10:30 am at 10:30 am |
  23. jeez

    News flash- UnAmerican president calls American Companies Unamerican. Oh the Irony!

    July 24, 2014 10:31 am at 10:31 am |
  24. Tony D

    Well, if I was running a company I would take Obama's words as a declaration of war and would be preparing to do exactly what he is railing against. It is pretty clear Obama doesn't like corporations and business, just the taxes he can take from them. I guess the millions of Americans working for these companies will start thinking a little harder at the voting booth now that they know their job might be on the line when they vote for an anti-business socialist.

    July 24, 2014 10:31 am at 10:31 am |
  25. Rob

    Does this apply to citizens too?
    Like citizens who sell loose cigarettes as a living, pay no taxes, have 6 kids that the government and we TAX payers are paying for?

    July 24, 2014 10:32 am at 10:32 am |
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