By Walter Alarkon and Sam Youngman
President Obama launched a high-stakes fight with big business Monday, calling for changes to the tax code that could raise taxes on U.S. multinationals by $210 billion.
Obama described the tax system as broken, adding that it is filled with loopholes written by corporate lobbyists that provide incentives for shipping jobs abroad.
“It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share,” Obama said.
The administration’s proposals could mean a tax hike of anywhere from 8 to 15 percent for U.S. corporations, on top of a base corporate tax rate that is already high for an industrialized country, said Clint Stretch, a tax expert for Deloitte Tax LLP.
“It doesn’t take some kind of rocket scientist to figure out that really can’t be very good for American businesses from a competitiveness point of view,” Stretch said.
The crackdown on corporate tax incentives is the latest move by the administration to squeeze big business. The president, who had taken heat from the left for continuing unpopular bank bailouts initiated by the Bush administration, has since called for restrictions on executive pay, the firing of General Motors CEO Rick Wagoner and a reorganization of Chrysler that offered a better deal to unions than a collection of hedge funds and investment banks that owned debt from the troubled automaker.
The tax proposals are a frontal assault on U.S. multinational companies, which are expected to engage in an aggressive lobbying and public-relations campaign to fight them off.
Obama described the tax system as broken, adding that it is filled with loopholes written by corporate lobbyists that provide incentives for shipping jobs abroad.
“It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share,” Obama said.
The administration’s proposals could mean a tax hike of anywhere from 8 to 15 percent for U.S. corporations, on top of a base corporate tax rate that is already high for an industrialized country, said Clint Stretch, a tax expert for Deloitte Tax LLP.
“It doesn’t take some kind of rocket scientist to figure out that really can’t be very good for American businesses from a competitiveness point of view,” Stretch said.
The crackdown on corporate tax incentives is the latest move by the administration to squeeze big business. The president, who had taken heat from the left for continuing unpopular bank bailouts initiated by the Bush administration, has since called for restrictions on executive pay, the firing of General Motors CEO Rick Wagoner and a reorganization of Chrysler that offered a better deal to unions than a collection of hedge funds and investment banks that owned debt from the troubled automaker.
The tax proposals are a frontal assault on U.S. multinational companies, which are expected to engage in an aggressive lobbying and public-relations campaign to fight them off.
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