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Weekly Address: President Obama – Closing Corporate Tax Loopholes

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From the White House – Weekly Address

In this week’s address, the President continued his call for our nation to rally around an economic patriotism that says rather than protecting wasteful tax loopholes for a few at the top, we should be investing in things like education and job training that grow the economy for everybody.

The President highlighted the need to close one of the most unfair tax loopholes that allows companies to avoid paying taxes here at home by shifting their residence for tax purposes out of the country. The President has put forth a budget that does just that, and he has called for business tax reform that makes investment in the United States attractive, and creates incentives for companies to invest and create jobs here at home. And while he will continue to make the case for tax reform, the President is calling on Congress to take action and close this loophole now.

Transcript: Weekly Address: Closing Corporate Tax Loopholes

Hi, everybody.  Our businesses have now added nearly 10 million new jobs over the past 52 months.  The unemployment rate is at its lowest point since September 2008 – the fastest one-year drop in nearly 30 years.  401(k)s are growing, fewer homes are underwater, and for the first time in more than a decade, business leaders around the world have declared that the world’s number one place to invest isn’t China; it’s the United States of America – and our lead is growing.

None of this is an accident.  It’s thanks to the resilience and resolve of the American people that our country has recovered faster and come farther than almost any other advanced nation on Earth.

But there’s another trend that threatens to undermine the progress you’ve helped make.  Even as corporate profits are as high as ever, a small but growing group of big corporations are fleeing the country to get out of paying taxes.  They’re keeping most of their business inside the United States, but they’re basically renouncing their citizenship and declaring that they’re based somewhere else, just to avoid paying their fair share.

I want to be clear: this is only a few big corporations so far.  The vast majority of American businesses pay their taxes right here in the United States.  But when some companies cherrypick their taxes, it damages the country’s finances.  It adds to the deficit.  It makes it harder to invest in the things that will keep America strong, and it sticks you with the tab for what they stash offshore.  Right now, a loophole in our tax laws makes this totally legal – and I think that’s totally wrong.  You don’t get to pick which rules you play by, or which tax rate you pay, and neither should these companies.

The best way to level the playing field is through tax reform that lowers the corporate tax rate, closes wasteful loopholes, and simplifies the tax code for everybody.  But stopping companies from renouncing their citizenship just to get out of paying their fair share of taxes is something that cannot wait.  That’s why, in my budget earlier this year, I proposed closing this unpatriotic tax loophole for good.  Democrats in Congress have advanced proposals that would do the same thing.  A couple Republicans have indicated they want to address this too, and I hope more join us.

Rather than double-down on the top-down economics that let a fortunate few play by their own rules, let’s embrace an economic patriotism that says we rise or fall together, as one nation, and as one people. Let’s reward the hard work of ordinary Americans who play by the rules.  Together, we can build up our middle class, hand down something better to our kids, and restore the American Dream for all who work for it and study for it and strive for it.

Thanks, and have a great weekend.

Bolding added.

~


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/ 15 Comments

15 comments

  1. JanF

    What Are “Inversions,” and Why Should You Care?

    Today, President Obama is heading to Los Angeles Trade Technical College, where he’s calling for a kind of “economic patriotism” that’s based on investing in the things that we know grow the economy for everyone (like education and job training) – not protecting wasteful loopholes for a few at the top.

    And he’s calling attention to one kind of corporate merger deal in particular – called an “inversion” – a word you might be seeing in a lot of news headlines lately.

    It’s not the most intuitive name for a corporate tax loophole, so we’re going to break it down for you.

    Q: So what exactly is an “inversion”?

    A corporate “inversion” is what happens when a U.S.-based multinational with operations in other countries restructures itself so that the U.S. “parent” is replaced by a foreign corporation – and usually one that’s in a country with a lower tax rate than the United States. As a result, on the whole, this means that corporate income tax that would otherwise be paid to the United States ends up going overseas.

    In other words, right now, our tax code allows any American company to merge with a foreign company (so long as that company’s shareholders own 20% of the combined firm) – and then “relocate” or “invert” to another country for tax purposes. This maneuver – which changes nothing about the actual operations that continue in the U.S. – allows companies to dramatically reduce the taxes they owe in the U.S. by taking advantage of loopholes in our tax system.

    Meanwhile, they would continue enjoying the benefits and protections of the American economy – provided by our tax dollars. It’s a big loophole – and right now, it’s completely legal.

  2. JanF

    Billionaire Blasts Companies That Jump Overseas To Duck Taxes: ‘I’m Selling Your Stock’

    … outspoken billionaire investor Mark Cuban pledged to sell off his holdings in companies that move offshore for tax reasons. “If I own stock in your company and you move offshore for tax reasons I’m selling your stock,” Cuban tweeted. […]

    Rather than seeking a synthetic boost in their stock price by shifting tax burdens onto others, Cuban said, American companies should persuade investors to accept slower growth in their market returns in exchange for job growth and expansion here at home. His primary rationale is a self-interested rather than a philanthropic or political one, as you might expect from a wealthy investor with a healthy competitive streak. “When companies move off shore to save on taxes, you and I make up the tax shortfall”

  3. JanF

    ThinkProgress

    More than two years after President Obama called on Congress to curb corporate offshoring, the Bring Jobs Home Act will finally get a debate in Congress after the Senate voted 93-7 to advance the bill on Wednesday.

    If the bill were to become law, corporations would lose the ability to deduct the cost of moving overseas from their taxes and gain an equivalent write-off for the cost of re-shoring jobs from abroad to America. President Obama first called on Congress to pass such legislation in early 2012.

    Republicans blocked debate on the measure that year, saying that such piecemeal changes to tax rules should not come before wholesale corporate tax reform. The fact that all but seven GOP senators voted for cloture on the measure Wednesday is therefore something of a reversal.

    It will die in the House of Representatives unless there is enough of a hue and cry.  

  5. JanF

    Arkansas Senate Nominee Touts Emergency Funds He Voted Against

    Rep. Tom Cotton (R-AR) has repeatedly voted against emergency funding for disaster relief, but attempted to take credit on Wednesday for the Obama administration’s approval of aid for 23 counties in Arkansas.

    He is not getting a free pass on this: Arkansas Senator Mark Pryor (D) is going after him for his hypocrisy.

    A Pryor campaign spokesman told the Arkansas Times, “It takes a special kind of arrogance for Congressman Cotton to take credit for disaster relief funds that he consistently and recklessly opposed.”

    Teapartiers who sacrifice their constituents on the altar of national party purity should suffer at the polls. It happened in Mississippi and we hope it happens in Arkansas.

  6. JanF

    I am not sure I have seen a stupider headline in my entire life: Are Opponents Of The Death Penalty Contributing To Its Problems?

    If those opponents of state sanctioned killing would just leave the states free to murder people in our name … and not try to shame the drug companies who create chemicals only intended to kill people … or, heaven forbid, require that death row inmates have attorneys and that they be allowed to plead on behalf of their clients … none of this execution botching would happen!!! {insert eyeroll here}

    I have a better idea: end all executions and that would guarantee that none would be botched.

  7. princesspat

    Boeing’s McNerney apologizes for remark about ‘cowering’ workers

    Boeing CEO Jim McNerney apologized Friday in a companywide message for telling analysts this week that he won’t retire after turning 65 next month because “the heart will still be beating, the employees will still be cowering.”

    McNerney’s message called the remark, made Wednesday at the end of a conference call about the company’s quarterly results, “a joke gone bad.”

    The comment incensed many workers, and the company’s unions were quick to pounce on it.

  8. JanF

    David Atkins: If corporations are people, shouldn’t they have to expatriate like people?

    It’s understandable if businesses have a different tax code that subjects them to different rules to a certain extent, though shady tax dodging is still an enormous moral and financial problem.

    But the issue starts to become even more open and shut once we start claiming that corporations are people. If a corporation has “free speech rights” to buy elections, then it should be subject to American taxes even if it “moves” overseas just like actual American people are. If a corporation like Hobby Lobby has personal “religious rights” not to cover its employees’ contraception, then it’s enough of a person to pay expatriate taxes if it decides to move to Ireland.

  9. JanF

    There is a lot wrong with Paul Ryan’s faux fix for poverty in America. And it is not surprising that it has doesn’t include anything to help women. I believe that the GOP fix for women in poverty is to “get poor enough to attract a spouse”.

    Ana Marie Cox: Paul Ryan has a big plan to end poverty. It just doesn’t include help for women

    [It] is almost impossible to have any serious discussion about poverty without talking about women.

    Women earn less in income, they make up a disproportionate percentage of the poor and they suffer the impacts of poverty – untreated mental illness and disease – at a higher rate than men. More women than men are at risk of becoming poor. Because so many of the poor and near-poor are women with children, their poverty has the worst kind “trickle down” effect you could imagine.

    But here are some things mentioned in Ryan’s report more times than women (0) or “females” (3): “success” (45), “opportunity” (132), “innovation” (20), and, of course, “block grants” (13).

  10. JanF

    Republicans are frantic to pass something so that when they go home over the August recess, they are not confronted by angry constituents who want them to shoot to kill the Central American babies as they are swimming ashore.

    Their latest offering extortion attempt is to try to force President Obama to reverse his 2012 executive order that “delayed the deportation of qualified young people brought to the U.S. illegally as children” in exchange for a billion dollars:

    The [GOP] conference met on Friday morning to discuss a path forward and, according to a GOP leadership aide, is closing in on a proposal to provide less than $1 billion in funding and amend a 2008 anti-trafficking law that prohibits U.S. officials from swiftly sending back minors at the border who are coming from countries other than Mexico and Canada.

    There’s no bill yet, and a vote isn’t certain. Even if the House passes such a proposal, Democratic leaders object to amending the 2008 law, so the measure could go nowhere in the Senate. […]

    Sen. Jeff Sessions (R-AL) and the activist group Heritage Action, are demanding they include language calling for an end to Obama’s executive action in 2012 to delay the deportation of qualified young people brought to the U.S. illegally as children.[…]

    The $1 billion in funding is far below President Barack Obama’s request of $3.7 billion to buy new housing facilities for the migrant children and bring in new judges to speedily determine whether they qualify for asylum or must return home. Senate Democrats may advance their $2.7 billion package next week, which doesn’t contain any changes to current law.

    My prediction is that the House does not pass anything because their nativist wing won’t support it … and there will be few if any Democrats interested in voting for the law. The Senate will bring a bill up and it will be filibustered. So everyone will go home and it will be left, once more, to President Obama to craft an executive order that alleviates the crisis and sets off another round of King Obama headlines. Sigh.

     

  12. JanF

    Again, corporations are only people when it is convenient for them. And they are probably glad that they don’t get thirsty!! Detroit Shuts Off Water to Residents but Not to Businesses Who Owe Millions

    Some 15,000 residential customers have lost water service, and tens of thousands more are in danger of losing it, thanks to past due bills. But businesses owing hundreds of thousands of dollars have not been disconnected, Detroit Water and Sewerage Department records show.

    According to a department list, the top 40 commercial and industrial accounts have past-due accounts totaling $9.5 million. That list includes apartment complexes, the Chrysler Group, real estate agencies, a laundromat and even a cemetery. […]

    More than 500 people rallied in downtown Detroit last week against the disconnections, calling them humanitarian violations. Since then, the department has suspended shutoffs for about two weeks.

    The UN has called water a basic human right and our Canadian neighbors, who obviously have a better understanding of the term “human rights” than teaparty Republicans, brought water to Detroit residents:

    Protesters fighting water shutoffs in Detroit greeted a convoy of Canadians who traveled to the city with hundreds of gallons of water to help those who have been cut off because of unpaid bills.

    Maude Barlow, a leading water rights advocate in Canada, and other activists brought 750 gallons of water in a seven-vehicle convoy that traveled through the Detroit-Windsor Tunnel to deliver the water and the message that the Detroit Water and Sewerage Department’s policy of shutting off service to delinquent customers violates the United Nations’ 2010 declaration that water is a human right.

    What that means is that every country in the world is responsible for looking after their most vulnerable people,” said Barlow, national chairwoman of the Council of Canadians, a social advocacy group. “It means that every country in the world is not allowed to turn the tap off of water that is already being delivered, and it means that nobody has the right to say no to water for people who cannot afford it.”

  13. JanF

    Motorcade For Imperial High Snotnose Obama Arrogantly Delays Pregnant Lady, INPEACH!

    The Imperial President King of the Formerly United States, Barack Hussein Marie Antoinette Louis XVI Obama, arrogantly forced a pregnant woman to wait to cross the street to a hospital while his motorcade passed in Los Angeles Wednesday. Needless to say, the Wingnuttosphere was all over the story, because it’s just one more symptom of how THAT MAN thinks he is better than the rest of us. You can bet that the motorcade would have come to a screeching halt if the lady had “looked like Obama’s son.”

    The unidentified woman was delayed for something like 30 minutes before she could cross the street to Cedars Sinai Medical Center. […]

    At Tucker Carlson’s Internet Café For Borderline Sociopaths, Jim Treacher called the delay of a woman in labor “a new low, even for Uncle Sam,” […]

    As of Thursday morning, the woman, who successfully crossed the street after the motorcade passed, had not yet given birth. Probably because she was traumatized. Guess we know which party is behind the REAL War on Women.

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