Obama: Tax Avoidance Akin to Renouncing Citizenship

President Barack ObamaLOS ANGELES, California — American-based firms that use legal loopholes to avoid paying U.S. taxes have effectively renounced any allegiance to their home country, President Barack Obama will claim during remarks at a community college here on Thursday.

Taking up a harsh new attack against companies that establish residency in tax havens like the Caymen Islands and Bermuda while keeping the bulk of their operations in the United States, Obama will call on Congress to mend a loophole allowing billions in tax revenue to slip through the government’s fingers.

A White House official, previewing Obama’s remarks, said the President would make the case on Thursday that tax-avoiding companies “are essentially renouncing their 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.”

The White House has aimed this week to advance the President’s domestic agenda, focusing on jobs programs and the economy. Bolstering the middle class has formed much of Obama’s midterm election year pitch.

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 he’ll deliver at a technical college in downtown Los Angeles, come at the end of a three-day fundraising swing which also brought him to Seattle and the Silicon Valley. The event will be 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 a more sober CNBC interview.

Obama will touch on an issue 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.

Both Republicans and Democrats say the entire tax code needs an overhaul, but Obama is pressing lawmakers to take action now to prevent so-called “inversions,” which allow U.S. companies to merge with foreign firms in countries with lower tax rates.

In the past decade, at least 47 U.S. companies have made the move. Several inversions have been proposed this year and more are in the works.

“We should prevent companies from effectively renouncing their citizenship to get out of paying taxes. What we need is a new sense of economic patriotism, where we all rise and fall together,” said U.S. Treasury Secretary Jack Lew In a letter to lawmakers last week, adding he believed any new measure should prevent companies from gaining tax advantages by incorporating overseas.

Lew said a new law should retroactively bar any firm that moved abroad after May 2014 from enjoying lower tax liabilities.

9 comments

  • Holla

    You’re right Obama that those corporations are traitors., but you’re also bringing in MS-13 members by the boatloads so it’s not like you care about us current citizens either. Many companies have fled to our taxing structure as well.

    BTW, a better solution is to just get rid of the IRS, income tax, and tell states to give states all the tax breaks they want with the condition that they keep all their operations in the USA

  • Dan

    If those companies would pay their fair share, just think how much we could send Guatemala, Honduras, Pakistan, Saudi Arabia etc. to fly those poor defenseless gang members into our country instead of riding the trains and buses in this summer heat. How dare somebody that gives people jobs use a legal tax incentive. I say Warren Buffet should give back his legal tax incentives on wind power, now that would choke a horse. Or how bout the grant to outfit trucks of his to haul natural gas? Ever seen a truck haul natural gas? But he only got 65,000 per truck I believe to do that. Usually everyone else uses pipelines to do it.

  • BrutallyHonest

    The tax loop holes for corporations need to be closed! Companies that send their work over seas and then bring the product back here need to be taxed for that. We need to keep jobs here. This country wasn’t founded or built on the current business practices that are being done. These CEO’s and others running these companies are driven by greed.

  • Dan

    How bout the tax incentive to buy a volt car? That’s what? $ 60,000 per car? Who pays for the gas on Air Force One when his wife takes a second plane? How bout legal loopholes for ObamaCare, oh wait tighten up the food stamp handouts, or the free rent deals, Lets quit the legal child tax credits oh wait I think he cut them down. How bout the legal way of not paying your student loans after 10 years? Wow the list is endless. But CNBC will get the whole story I’m sure. NOT.

  • Randy Graven

    So I guess you guys think the corporations should get away with 13% or less while the rest of us pay 30-35%

  • do ur job

    All fluff, no substance. All those “free trade” agreements pretty much eliminate all governmental action. Buy local? Buy American? Do we make anything?

  • William Denison

    But I’m so confused- because buying American means buying Union and they aren’t American, they’re socialists.

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