Barack Obama is set to unveil a two-pronged attack on business Monday, which includes eliminating some tax deductions for companies earning profits in countries with low tax rates, as well as consider US citizens who use tax havens such as the Bahamas or Cayman Islands guilty of violating US tax laws.
Another aspect of the Obama plan will stop companies from being able to write-off domestic expenses for generating profits abroad. For instance, administrative tasks performed in New York for a London office would not be tax deductible in the United States. Administration officials depicted the move as a way to close unfair tax loopholes that encouraged companies to send jobs overseas.
Obama also intends to ask Congress to hire 800 new federal tax agents to enforce his war on corporate wealth.
It is estimated the Obama plan will bring in US $210 billion in tax revenue over the next decade.
In exchange for congressional approval for his plan, Obama is 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 US $74.5 billion over the next decade.
The Obama plan wouldn’t go into effect until 2011; Obama has said he does not want to tinker with tax revenues until his $787 billion stimulus plan has run its course. The proposals, however, were far from complete, and aides said this was just one piece of the administration’s plan for sweeping overhaul.
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It’s always wonderful to see how they express the revenues generated by their plans. But what about the cost?
What will 800 agents and all the resources they require over 10 years cost the taxpayer? Obviously not as much as the revenues generated, but why not state the real benefit?
And what about revenues lost when entities move their HQ’s or registered offices off-shore when taxes become non-competitive with other countries? It is already happening in the UK, because the Labour party under Gordon Brown is also targeting “the rich”. You have to be very careful in that game, because you don’t want to get rid of the entities responsible for creating wealth.
What is called unfair tax loopholes by the government is referred to as tax deductibles by taxpayers, whether corporate or private. It just sounds better when they say they are closing tax “loopholes”.
This is not about money it is about power….Change we can believe in? “WE ARE THE ONES WE HAVE BEEN WAITING FOR”.
Does his plan include exempting democrats, leftists, communists and liberals from the new regulation so that is only applicable to conservatives with tax shelters?