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Obama Plan to Curb Tax Avoidance Irks Tech World

theodp (442580) writes | more than 4 years ago

United States 1

theodp writes "Barack Obama has squared up for a major battle with big business, announcing a crackdown on offshore tax avoidance and evasion by US multinationals that's designed to raise $210B and make it easier for companies to create 'good jobs here at home'. Obama cited a building in the Cayman Islands where more than 18,000 US companies are housed: 'Either this is the biggest building in the world or it is the biggest tax scam in the world,' he said. 'I think the American people know which it is.' The administration says that more than a third of US foreign profits in 2003 came from Bermuda, the Netherlands and Ireland, and noted US companies paid an effective tax rate of just 2.3% on the $700bn they earned in foreign profits in 2004. Among tech companies affected by the crackdown, Microsoft joined 200 companies who signed a letter complaining that the proposed tax changes would put them at a disadvantage with their rivals, Cisco moaned that the measures 'would adversely impact our ability to invest and grow our business in the U.S.,' and Google declined to comment for the time being."

1 comment

Good for Obama (1)

Johnson2206 (1547441) | more than 4 years ago | (#27821175)

I can totally see why companies would be pissed, they got caught. It isn't that they were really breaking the law, but they were severely undermining it. An effective tax rate of only 2.3% really? That's not what taxes are made for. They are designed to serve the country by providing revenue to the government to fulfill its obligations to the people. So some companies are going to have to make some changes to compete against the rest of the world. That's an important part of business being able to innovate, adapt, and change with the seasons. Offshoring can help big companies, but it hurts our people and our economy.
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