President Barack Obama’s fiscal 2016 budget would impose a one-time 14 percent tax on some $2 trillion of accumulated U.S. corporate profits earned abroad and set up a 19 percent tax on future foreign earnings, a White House official said on Sunday.
Revenues from the one-time tax be used to fund infrastructure projects and fill a projected shortfall in the Highway Trust Fund.
Obama’s fiscal 2016 budget, which is set to be released on Monday, is as much a political document as a fiscal roadmap. It would require approval from Congress to take effect and full approval by the Republican-controlled legislature is very unlikely.
The White House has long been critical of practices by U.S. companies that it views as avoiding tax responsibilities at home. The two proposals are part of a broader tax reform package that the Obama administration hopes will re-focus tax advantages toward middle-class Americans.
“This transition tax would mean that companies have to pay U.S. tax right now on the $2 trillion they already have overseas, rather than being able to delay paying any U.S. tax indefinitely,” a White House official said.
“Unlike a voluntary repatriation holiday, which the president opposes and which would lose revenue, the president’s proposed transition tax is a one-time, mandatory tax on previously untaxed foreign earnings, regardless of whether the earnings are repatriated.”
In the future, the budget proposes that U.S. companies pay a 19 percent tax on all of their foreign earnings as they are earned, while a tax credit would be issued for foreign taxes paid, the official said.
“After this initial payment, foreign earnings could be reinvested in the U.S. without additional tax, which would level the playing field, and encourage firms to create jobs here at home,” the official said.
Obama’s proposal is aimed at closing a tax loophole that lets multinational corporations avoid paying taxes on active profits they earn abroad, or that they shift into foreign countries from the United States through various strategies to reduce their U.S. taxable income.
As long as these foreign profits are not formally brought into the United States or repatriated, no tax is due on them. Recent estimates put the total of tax-deferred foreign profits at $2.1 trillion.
(By Jeff Mason, additional reporting by Kevin Drawbaugh; Editing by Bill Trott)
‘You don’t get to dictate terms’: Trump soundly mocked for demanding speedy resolution to impeachment
President Donald Trump broke with his Republican defenders, who say impeachment is moving too fast, and demanded a quick resolution to the constitutional process.
House Democrats moved the impeachment process from the Intelligence Committee to the Judiciary Committee after nearly two weeks of testimony, and Trump called for a speedy end to the matter.
"The Do Nothing Democrats had a historically bad day yesterday in the House," Trump tweeted. "They have no Impeachment case and are demeaning our Country. But nothing matters to them, they have gone crazy."
"Therefore I say, if you are going to impeach me, do it now, fast, so we can have a fair trial in the Senate, and so that our Country can get back to business," he added. "We will have Schiff, the Bidens, Pelosi and many more testify, and will reveal, for the first time, how corrupt our system really is. I was elected to 'Clean the Swamp,' and that’s what I am doing!"
‘Our democracy is what’s at stake’: Pelosi shreds Trump in blistering endorsement of impeachment
Rep. Nancy Pelosi (D-CA) on Thursday endorsed drafting articles of impeachment against President Donald Trump and made the case that the president's actions made him a threat to American democracy.
During her address, Pelosi explained that the stakes in impeaching Trump were the very foundations of American government.
"Our democracy is at stake," she said. "The president leaves us no choice but to act because he is trying to corrupt, once again, the election for his own benefit. The president has engaged in abuse of power, undermining our national security, and jeopardizing the integrity of our elections."
InfoWars made up lies about Islamic community to help Alex Jones generate more traffic: former writer
On Thursday, The New York Times reported that Josh Owens, a former staffer at the fringe conspiracy theory site InfoWars, admitted that his team knowingly promoted fake stories about Islamberg, a rural religious community founded by mostly Black Muslims from New York City on the border between New York and Pennsylvania.
According to Owens, InfoWars initially conducted interviews with people near the community, hoping that they would tell horror stories about a group of militants hellbent on enslaving America under Sharia law. Instead, locals described the people of Islamberg as "kind, generous neighbors." This wasn't a story Alex Jones would have been able to sell to his far-right conspiracy theorist audience — so, Owens said, his team decided to just lie.