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. John

    Maybe if we get away from corporate tax and do a flat tax across the board for everyone might be the right choice. Manufacturing here in the U.S. is going away and we are becoming a service nation not a producing nation anymore. That is because for a company to profit here is almost impossible when other companies around the world have access to cheap labor and low corporate tax. Maybe quit giving all our money away to other countries and give tax advantages here to businesses and corporations, so they want to stay and build in the U.S. Our government is the one that needs to be taxed for not using the taxes properly. I believe in taxes but when your country is losing its economic grip raising taxes can do more harm than good. Get rid of all tax incentives no one deserves free rides, take that money build our infrastructure back and put Americans to work so we can quit saying that it is okay for the government to take care of them. Make education cheaper so our children have access to higher education, quit making them learn to be cultured and focus on areas that matter like science, math, and the physical trades, such as electricity, plumbing, masonry, those are the areas that matter.

    July 24, 2014 09:20 am at 9:20 am |
  2. rosaadriana2014

    I agree with that. If you don't want to pay your taxes go somewhere else. You don't deserve the benefits of living in the US.

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

    "Obama will call on Congress to mend a loophole allowing billions in tax revenue to slip through the government's fingers."

    If the bloody US government weren't so bloody greedy, this wouldn't be an issue.

    "...even as they benefit from all the advantages of being here in America."

    What "advantages" does America offer that can't be had just as well elsewhere? And in many places more cheaply with respect to taxation. There's no longer much comparative bang for the tax buck of being in the US. Why would a business stay in a country where it's over-regulated, over-taxed, reviled and attacked by its own government, and treated as if its sole obligation is to support a monstrous welfare state?

    "What we need is a new sense of economic patriotism..."

    Patriotism must be earned; it can't be demanded. And the present Administration is, far from earning the loyalty of the people of this country, is doing its best to incite class warfare, pitting citizen against citizen, putting loyalty to Party and class a long way ahead of any loyalty to country.

    The only way, so far as I can tell, to establish a national unity and thus any national patriotism, is to distil what it means to be an American to a set of ideals on which a huge majority of us can agree—and that does not include dividing us up into "makers" and "takers." It doesn't include using legislative dirty tricks to pass huge and absolutely partisan legislation that does little but incite, on the one hand, gloating and, on the other, outrage. If Mr Lew wants "economic patriotism," he needs to convince his boss to offer something we can all be patriotic about.

    July 24, 2014 09:21 am at 9:21 am |
  4. guest

    If corporations want lower taxes, they must raise wages. All the money has accumulated at the top, the government has to have revenue coming in. Corporations must either pay the lion's share of the tax revenue, or must raise wages so that higher revenue is coming in from all the workers, but either way, this must stem from corporation bottom lines, they have pretty much all the money in america, most of the money in the entire world. It must trickle down, or you make the republican patron saint reagan into a liar and failure at policy.

    July 24, 2014 09:22 am at 9:22 am |
  5. Tom

    The Republicans are being set up, so they can be knocked down once again.

    July 24, 2014 09:22 am at 9:22 am |
  6. Joe

    The IRS is a criminal organization. Why should we pay taxes to those who break the law?!

    July 24, 2014 09:22 am at 9:22 am |
  7. Bill

    Obama talking about allegiance to the United States.

    That's rich.

    July 24, 2014 09:22 am at 9:22 am |
  8. dazzy

    So how about changing the laws to eliminate loopholes instead of just name calling?

    Obama- "You're a big meanie!!"

    Oh I know, closing the loopholes would get all your funding cut off.

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

    Let's revise that statement slightly, shall we? "...that tax-avoiding illegal immigrants "are essentially renouncing their (non-existent) American citizenship so that they can ship their profits overseas to avoid paying taxes – even as they benefit from all the advantages of being here in America."

    Hey Obama, wake up. I took a look at my birth certificate this morning. I can't any words on that document stating that I'm a slave to a tax system, or that I owe the government of the U.S. a living.

    Un-American? I think not...not after five years and eight months in full combat in Vietnam, Bosnia, and Iraq. The only "Un-American" in this plot is YOU!

    July 24, 2014 09:22 am at 9:22 am |
  10. HenryMiller

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


    July 24, 2014 09:22 am at 9:22 am |
  11. Mark

    And tax dodging politicians? What are they?

    July 24, 2014 09:23 am at 9:23 am |
  12. Kilo

    These companies are using the law as written by Congress and signed by a President. More power to them!

    July 24, 2014 09:23 am at 9:23 am |
  13. Bill

    The US is the ONLY major country in the world that feels they have the right to tax worldwide income.

    Fall in line with the rest of the world, and you'll see much less ... how did Obama put it ... "tax avoidance".

    July 24, 2014 09:23 am at 9:23 am |
  14. A Kickin Donkey

    They are leaches Mr. President, call them out. It is a PRIVILEGE to be able to sell in the lucrative American market. In a stable country, with expansive transportation & distribution infrastructure. In a country without masivecorruption & bribes.

    ME ME ME is all these types of people see. America is equal parts WE and ME. These people (like Mitt) or corporations (like GE) benefit from American youth going off to die in wars that protect their special privileges WITHOUT having the decency to pay for the bullets o r body armour that they need. None of MItts FIVE SONS, all from the 9-11 generation, went to fight for Ahmerican interests. . . . . But Beau Biden sure did. - Who is truly patriotic?

    July 24, 2014 09:23 am at 9:23 am |
  15. HenryMiller

    @RES: "They use U.S. resources and then don't pay their fair share."

    Who gets to define "fair share?"

    July 24, 2014 09:24 am at 9:24 am |
  16. James W. Texas

    This is not a Repub vs Demo issue. Both sides of the isle realize that companies avoiding US taxation is bad for our country. Issuing a 50% tax burden to multinational companies selling their product within the borders of the US will stop this nonsense once and for all.

    July 24, 2014 09:25 am at 9:25 am |
  17. Walter

    Legally trying to minimize your tax burden is WRONG. Which is why Obama never takes any deductions on HIS taxes.

    Oh, wait...

    July 24, 2014 09:26 am at 9:26 am |
  18. pjoe

    The U.S. tax-code is incredibly complex (it's up to about 74,000 pages now). Loopholes for everything. If you can avoid paying tax legally ... are you a "tax avoider"?

    July 24, 2014 09:27 am at 9:27 am |
  19. Indepman

    The Pres shouldn't hate on the corporations because they do what our present tax codes allows. the real issue is why hasn't he taken up the issue and pushed for reforming the tax code. Talking points to stir up division with more us vs them accomplishes nothing.
    He has the power to push for reform.

    July 24, 2014 09:27 am at 9:27 am |
  20. Marc

    Who will fund these entitlement programs and the socialist government if these tax dodgers keep money overseas? Outrageous!

    July 24, 2014 09:27 am at 9:27 am |
  21. Walter

    Mr. Obama perhaps they're just exercising tax-ucotorial discretion? You know that one, don't you? It's where certain individuals decide what laws to enforce or obey?

    July 24, 2014 09:28 am at 9:28 am |
  22. Walter

    They were TOTALLY going to pay more taxes, but their hard drives crashed. So sorry. That's totally cool with you, right?

    July 24, 2014 09:29 am at 9:29 am |
  23. Gunderson

    Now old Gunderson not know everything he understand about this. So let's look at some "Facts". Pilgrims come to New World. Figure out Constitution. Give People the vote. Great new plan, right? At first people take responsibility for actions. So far so good. Then people forget how to take responsibility. Pretty soon they go straight to "Source" to get money. Forget old Aesop Fable about Killing Goose that Lay Golden Egg. Pretty soon there no more Golden Egg. Pretty soon what's left of Golden Egg move other place or go under. New Term. Tax Avoidance. Perfectly Legal. Another new Term, same as old Term. Beggers can't be Choosers. Another new term. Trickle Down Economics. News Flash: Only Economics there is. So, back to drawing board. How get Companies come back to U.S? You figure out way to screw companies, they figure out way to screw you. Called Tax Avoidance. Guess who's on bottom??

    July 24, 2014 09:29 am at 9:29 am |
  24. Walter

    What difference at this point does it make?

    July 24, 2014 09:29 am at 9:29 am |
  25. Mike

    I completely agree with the President on this subject. Rules and laws must be stiffened to punish the cheats.

    July 24, 2014 09:30 am at 9:30 am |
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