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Obama Vows Crackdown on Tax Evaders

By PHILIP ELLIOTT
,
AP
posted: 188 DAYS 10 HOURS AGO
comments: 3466
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WASHINGTON (May 4) -- President Barack Obama proposed Monday to raise taxes on the overseas profits of U.S. companies and to go after evaders who abuse offshore tax shelters. In announcing a series of steps aimed at overhauling the U.S. tax code, Obama complained that existing law makes it possible to "pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York. "
The proposal will be a hard sell in Congress. Sen. Max Baucus of Montana, chairman of the tax-writing Senate Finance Committee, offered a tepid response.
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"Further study is needed to assess the impact of this plan on U.S. businesses," said Baucus, a Democrat. "I want to make certain that our tax policies are fair and support the global competitiveness of U.S. businesses."
The president said he wants to prevent U.S. companies from deferring tax payments by keeping profits in foreign countries rather than recording them at home and called for more transparency in bank accounts that Americans hold in notorious tax havens like the Cayman Islands.
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"If financial institutions won't cooperate with us, we will assume that they are sheltering money in tax havens and act accordingly," Obama said.
Many provisions of the complicated and much-maligned tax code in fact are worded in ways that allow people to legally cut corners. And the code is filled, likewise, with language that in many circumstances authorizes legal tax end-arounds, if not pure avoidance.
During much of his long campaign for the White House, Obama campaigned for an overhaul and simplication of the code. At the White House event Monday, he said his new proposals would generate an average of about $21 billion a year in new taxes. That would amount to only about 2 percent of next year's projected deficit of $1.2 trillion, however.
Under his plan, companies would not be able to write off domestic expenses for generating profits abroad. The goal is to reduce the incentive for U.S. companies to base all or part of their operations in other countries.
Obama said the government also is hiring nearly 800 new IRS agents to enforce the U.S. tax code.
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Obama's Big Breaks From Bush
Ending a key policy of the Bush years, the Obama administration announced March 13 it was dropping the term "enemy combatant" to justify holding prisoners in Guantanamo Bay. It's the second major policy change in regard to the U.S. prison there -- Obama signed an order in January to close the facility within a year. Click for more of Obama's biggest breaks from Bush.
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Congress is expected to resist significant portions of Obama's plan.
The administration is not seeking to repeal all overseas tax benefits. Obama called his proposal "a downpayment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations."
"Nobody likes paying taxes, particularly in times of economic stress," he said. "But most Americans meet their responsibilities because they understand that it's an obligation of citizenship, necessary to pay the costs of our common defense and our mutual well-being."
The current tax code, Obama said, makes it too easy for "a small number of individuals and companies to abuse overseas tax havens to avoid paying any taxes at all."
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Obama said he was willing to make permanent a research tax credit that was to expire at the end of the year and is popular with businesses. Officials estimate that making the tax credits permanent would cost taxpayers $74.5 billion over the next decade.
But administration aides said 75 percent of those tax credits cover the cost of workers' wages.
Under existing laws, companies with operations overseas pay U.S. taxes only if they bring the profits back to the United States. If they keep the profits offshore, they can defer paying taxes indefinitely. Obama's plan, which would take effect in 2011, would change that.
Obama officials also said they would close a Clinton-era provision that would cost $87 billion over the next decade by letting U.S. companies "check the box" and treat international subsidiaries as mere branch offices. Officials said it was meant as a paperwork shortcut that is now a widely used and perfectly legal way to avoid paying billions in taxes on international operations.
Treasury Secretary Timothy Geithner joined Obama for the announcement. He said the proposals would end "indefensible tax breaks and loopholes which allow some companies and some well-off citizens to evade the rules that the rest of America lives by."
Geithner called them "common-sense changes designed to restore balance to our tax code."
The White House said that in 2004, multinational corporations enjoyed an effective tax rate of 2.3 percent in the United States because of such allowances. Aides said that was the most recent year available for analysis.
They said the situation was indefensible.
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Copyright 2009 The Associated Press. The information contained in the AP news report may not be published, broadcast, rewritten or otherwise distributed without the prior written authority of The Associated Press. Active hyperlinks have been inserted by AOL.
2009-05-04 13:11:06

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MONROE LAW

06:50 AMMay 11 2009

Mr. Obama has a talent for jumping on badwagons with a theme that appeals to those who don't think things through. He and his ACORN pals castigated the AIG executives for taking bonuses that they were entitlted to under the Bill drafted by his own party, Mr. Dodd in particular. While all the lemmings rallied and issued death threats to AIG execuitves, the incompetent hacks at Fannie and Freddie quietly received even larger bonuses. HIs current campaign to win the hearts and minds of the easilly swayed pretends that picking one little nit out of an infested tax code is admirable progress. If he was serious about reform he would scrap the entire thing so that nobody, including his Congressional colleagues would have a place ot hide their misconduct. Let's not forget his nasty, petty comments about the investors who chose to honor their fiduciary responsibilities to their shareholders while he gave Chrysler to the UAW and Fiat. The man has a proven ability to obfuscate and get fools...

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JAMESTX2947

01:10 AMMay 11 2009

Theres a long black train coming down the line feeding on the souls who are lost and blind rails of sin only evil remains watch out brother for that long black train.Obama train sounds good but its only location is the middle of nowhere.

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(1)

JAMESTX2947

11:41 PMMay 11 2009

Maybe he needs to fire the tax evaders he hired,least anyone forget.

AVG RATING:
(2)

TommyBoy71754

04:10 PMMay 10 2009

i"ll bet he starts at the bottom, you know those that got away with 10 or 15 dollars instead of the ones that got away with 10 or 15 millon!!!!!!!!!!!!!!!!!

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(4)

Wbischo

01:28 PMMay 10 2009

I would like to see Obama ask the IRA to enact some type of tax deduction for all the older citizens who are having to help support extended families in times of economic hardships. I know it is "optional" for parents to do so, but it is hard not to give financial support to your children and their families when there is a job loss and they are in danger of losing a car or the home they live in. In some cases children are having to help parents or siblings with financial problems for the same reasons. We have gone alomst bankrupt over the last two years, helping our own extended family, and we don't get to claim any of the financial output, and have little hope of ever being repaid, (in our lifetime, at least). We are in our seventies. It will be hard enough for everyone to just "recover" and get back to normal over the next few years. It is devastating to have to use up all your retirement savings just to get by.

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MONROE LAW

10:44 AMMay 10 2009

It would be nice if Mr. Obama would pay as much atention to the 12 to 20 million illegal aliens in the coutry before he starts pretending to "fix" the tax code. The savings to the country reaped by not providing health services and eductation to people not paying into the sytem would be a nice downpayment on national health care for citizens. His "crack down" plan will simply disencourage investment. That is the kind of thinking that decreases growth and job creation.

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Watsos

10:09 AMMay 10 2009

Mr. Obama intends to parasitize anybody who does productive work for a living.

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SanRich6

07:41 AMMay 10 2009

WHY DO SOME PEOPLE HATE THE WEALTHY? WE DIDN'T USED TO..WE USED TO ADMIRE THEM, ASPIRE TO BE LIKE THEM, WE LEARNED FROM THEM HOW TO HAVE PRIDE OF OWNERSHIP, TO WORK HARD, AND TO ACHIEVE. NOW, PEOPLE JUST WANT WHAT THE WEALTHY WORK FOR SO THEY CAN CONTINUE THEIR TREK IN THE GUTTER OF BEGGING AND HANDOUTS WHILE LIVING IMMORAL, UNHEALTHY, AND PERVERTED LIFESTYLES. WHAT HAS HAPPENED TO THE AMERICAN PEOPLE? WHERE IS YOUR PRIDE, YOUR WORK ETHIC? WHERE IS YOUR SHAME IN DEMANDING OTHER PEOPLE'S MONEY? WELL...FOLKS...I WILL TELL YOU...50 YEARS OF DUMBING DOWN, MULTICULTURALISM, DIVERSITY, SECULAR HUMANISM, ANTI FAITH TEACHINGS, ANTI AMERICA TEACHING, AND MAKING PEOPLE INTO VICTIMS...BROUGHT TO US BY THE UGLY LIBERAL AGENDA..NOW WE HAVE A COUNTRY FULL OF WHINERS, ILLEGALS, REALLY IGNORANT PUBLIC SCHOOL KIDS, AND THEY ARE RIPE FOR BEING DEPENDENT UPON THE GOV....JUST LIKE THE MARXIST, COMMUNISTS, AND SOCIALISTS WANTED..AND WITH OBAMA...THEY WILL GET WHAT THEY WANT..AND THE LAST FREE COUNTRY ...

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Youfowler

06:48 AMMay 10 2009

Holy shot! Curious George has a whole cabinet full of tax evaders.This monkey has ruined the country.

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JHughesLMFT

06:13 AMMay 10 2009

YOUR CAN'T TRUST THE TOTALITARIAN, MARXIST DEMOCRATS WITH THE REINS OF POWER------->PERIOD. THEY'RE NOT FOR PROTECTING AMERICA. THEY'RE FOR STEALING YOUR TAX DOLLARS AND GIVING IT TO THE LAZY, THE PARASITICAL, THE ILLEGAL ALIENS, THE CORRUPT UNIONS (CALIF. TEACHER'S UNION IS THE WORST), THEIR CORRUPT SUPPORTERS; PUBLIC EMPLOYEE UNIONS , AND (TO TOP IT OFF) SENDING YOUR TAX DOLLARS TO ISLAMOFASCIST TERRORISTS GROUPS, LIKE HAMAS?? (SINCE WHEN DO FIRE FIGHTERS GET $200K BENEFITS, WHILE PLAYING PRACTICAL JOKES ON THEIR PAID TIME--LIKE PUTTING DOG FOOD IN SPAGHETTI??--THEN DEMAND MORE TAX PAYER MONEY IN LAW SUITS, AS THEY BANKRUPT LOS(T) ANGELES?) THE UNIONS HAVE BANKRUPTED CALIFORNIA, G.M., CHRYSLER CORP, THE EDUCATION SYSTEMS AND SCHOOL DISTRICTS, AND THE ILLEGAL ALIENS, WHOM THE DEMOCRATS WANT TO EXPAND THEIR BASE--ARE DESTROYING AMERICA. VOTE THEM ALL OUT NOW!!!!!!!!!!!!!111

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President Barack Obama vowed Monday to detect and pursue American tax evaders and go after their offshore tax shelters.