Obama offers populist message on corporate taxes at end of fundraising trip
July 24th, 2014
06:25 PM ET
8 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.”

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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.

Filed under: Democrats • Economy • Jack Lew • President Obama • Republicans • Taxes • Treasury • Treasury Department • White House
soundoff (323 Responses)
  1. rad666

    Obama is starting to take on Palin behavior.

    July 24, 2014 09:13 am at 9:13 am |
  2. mbutler91c

    So just the Right or is he including all of his buddies on the Left who use the same exact laws passed by congress for all to use? Here's the deal, close the loopholes or shut-up about them.

    July 24, 2014 09:14 am at 9:14 am |
  3. scott55

    Liberals get this all wrong. Corporations do not pay taxes, these expenses are passed along to the consumer. obama has a spending problem, not a revenue problem.

    July 24, 2014 09:14 am at 9:14 am |
  4. John

    How can he possibly mention citizenship? Thousands coming across the border. They won't be paying taxes.

    July 24, 2014 09:14 am at 9:14 am |
  5. David

    For once, I totally agree with him on this issue

    July 24, 2014 09:14 am at 9:14 am |
  6. Annie

    Perhaps policies and taxes that nearly force corporations to do their work elsewhere and leave their profits overseas is the real issue. How about we make minimum wage $50/hr? That will certainly help our situation (not).

    July 24, 2014 09:15 am at 9:15 am |
  7. Bruce in VA

    Maybe our empty suit president should shut is pie hole and propose legislation to close the loopholes.

    July 24, 2014 09:15 am at 9:15 am |
  8. Rudy NYC

    How does the money leave our shores to go "off shore" in the first place? Hmm?

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

    It's disgusting seeing how so many people twist the fact that companies have been using this loophole for many years and administrations to avoid paying taxes into a partisan attack.

    While he is addressing it in his usual inept way (yes I'm no Obama fan) at least he IS ADDRESSING IT.

    The US has a total tax rate of GDP that is lower than every other 1st world nation and we spend an exponentially larger portion of that lower tax rate on defense/military spending than any other 1st world nation...that simply does not make sense.

    July 24, 2014 09:16 am at 9:16 am |
  10. mindstorms1

    I thought cheating on taxes was the norm. I wonder many people who are not salaried employees report their real income.

    July 24, 2014 09:16 am at 9:16 am |
  11. Anonymous

    But they're not tax-dodgers. They're using very legal ways to limit their tax liability. If you don't like the laws – change 'em.

    July 24, 2014 09:16 am at 9:16 am |
  12. J. Gordon

    When all is said and done...a lot will have been said.

    July 24, 2014 09:16 am at 9:16 am |
  13. Randy Sandberg

    Mr. President, what you're doing to our country is much more "un-American" than what these companies do.

    July 24, 2014 09:17 am at 9:17 am |
  14. Anonymous

    Unfortunately it is American. Please CHANGE THE LAW to prevent tax dodging.

    July 24, 2014 09:17 am at 9:17 am |
  15. Brian

    These companies have one and only one moral responsibility and that is to maximize value for shareholders. What do you think pays for your retirement? Good will? The real answer IMO is to eliminate corporate taxes entirely to encourage companies to repatriate cash and spend it here. All we are doing with high tax rates is pushing companies out of the US. Let's be smart and pragmatic about this instead of political.

    July 24, 2014 09:18 am at 9:18 am |
  16. notthetroll

    Why doesn't this acknowledgement tell the President a comprehensive redo of the entire tax plan is long overdue? He could actually salvage some of his reputation with a simplified, rock solid, brand new tax code.

    July 24, 2014 09:18 am at 9:18 am |
  17. Dan Pendleton

    If they profit from US consumers, it only makes sense for them to pay US taxes.

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

    Really easy solution, adjust the corporate tax rate to make it more compelling to keep the money in the US. The left points to other industrialized nations health care, but ignores the fact that those nations have reasonable tax rates for their corporations, thus generating more tax dollars.

    I really challenge the left to show any examples where the current dem party position IS NOT "Let's make the rich pay more"...There could be some truth to the need to make changes, and I don't want to sound too far right leaning, but even to this moderate this is just becoming a one solution administration. The solution for them always being that the "rich" are to blame, and everyone else is just a helpless victim. Yeah, maybe I'm a little strong, but wow..Like I said, just point me to any position that doesn't seem to follow the 'eat the rich" philosophy.

    July 24, 2014 09:19 am at 9:19 am |
  19. blah

    What a ignorant statement. These corps while not doing the "right" thing are just following the ridiculously complex and hole-ridden tax law to the letter that he and the rest of the politicians don't bother to fix. Not even close to renouncing your citizenship.

    July 24, 2014 09:19 am at 9:19 am |
  20. CrashTestHomie

    Tax Evasion is in the spirit of which this country was founded!

    July 24, 2014 09:19 am at 9:19 am |
  21. Joel

    Not paying taxes = Unamerican? What does that say about the almost half of the population that pays no income taxes? Taxing people to the point that they want to leave is what is truly Unamerican. A leader that tries to impose his will on the people without going through Congress is Unamerican. Attempting to ignore the wishes of who didn't vote for you simply because they were in the minority (put another way, the ones who could see through your BS) is Unamerican.

    July 24, 2014 09:19 am at 9:19 am |
  22. SEG

    Yet, it is ok for Obama to give Chrysler to an Italian automaker?

    July 24, 2014 09:19 am at 9:19 am |
  23. Sig

    Politics no longer revolves around political parties, or loyalty to such causes.
    It now hinders on whether or not you believe that:
    1. Your taxes are way too high for the services which your government provides, and therefore you want your taxes lowered.
    2. You want the government to provide more services, and you have absolutely no problem forcing others to pay for those services.
    3. Race or personal ideals – You support anyone (no matter how bad) as long as they meet your personal agenda.

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

    I'm hiding some of my foodstamp wealth in an offshore account.

    July 24, 2014 09:20 am at 9:20 am |
  25. Jane Martin

    I am so glad to see him finally bringing this to the forefront of American news!!! Hold these companies and CEO's accountable!!! They are the reason for the downfall of the American economy. Not welfare recipients. I do not want to hear that rhetoric again. Get the wealthy, tax-crooks of the 1% and MAKE THEM PAY!!!

    July 24, 2014 09:20 am at 9:20 am |
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