In Obama’s Budget, a Suggestion More Multinational Corporate Profits Are Escaping U.S. Taxes
11th February 2016
If you look closely at the numbers in the Obama budget proposal, you find that Treasury economists figure that U.S. multinational companies with profits overseas are exploiting the tax code even more than previously estimated–which means even more money would be raised by changing the way U.S. companies’ international profits are taxed.
Oh, so is Obama suggesting that we bring our corporate tax rates in line with other developed nations and encourage American companies to bring that money back home rather than scrambling around for tax shelters overseas? No, of course not.
The Obama plan would require companies to pay that 19% minimum rate to all governments combined, not just the U.S. The taxes that U.S.-based firms pay to foreign governments would count toward the minimum. The less they pay in taxes abroad, they more they’d have to pay to the U.S.
Rather than addressing the basic problem, the administration is trying to nail the doors shut so the livestock can be more easily slaughtered.
It’s hard to say definitively what’s behind this.
No, it’s not. The U.S. government is determined to bleed its businesses as thoroughly as it can, and this is the only area in which appealing to how foreign nations do things doesn’t seem to carry any weight.
It looks like U.S. companies are increasingly skillful at finding low-tax countries in which to book their profits while, for their part, foreign governments are reducing the rates at which they tax business.
And the administration’s actions merely increase the incentives to be even more clever in finding loopholes. The more cornered a victim feels, the more desperate the attempts to escape. And I suspect that companies like Apple can afford better attorneys and accountants than the IRS can.