President Barack Obama on Monday proposed to close US tax loopholes for companies and individuals with operations or bank accounts overseas.
Obama said he wanted to prevent US companies from deferring tax payments by keeping profits in foreign countries rather than recording them at home. He also called for more transparency in bank accounts held by Americans in tax havens such as the Cayman Islands.
“If financial institutions won’t cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly,” he said.
Obama said his plan would generate $210 billion in new taxes over 10 years and “make it easier” for companies to create jobs at home.
Over a decade, $210 billion would make a modest dent in the federal deficit, expected to be $1.2 trillion in 2010. Under the plan, companies would not be able to write off domestic expenses for generating profits abroad.
The goal is to reduce the incentive for US companies to base all or part of their operations in other countries. AP