Quantcast
Connect with us

Obama’s budget proposal includes a 14 percent tax on US companies’ foreign earnings

Published

on

US President Barack Obama speaks in Boise, Idaho on Jan. 21, 2015 (Photo by Saul Loeb for Agence France-Presse.)

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.

ADVERTISEMENT

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.

ADVERTISEMENT

“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.

ADVERTISEMENT

(By Jeff Mason, additional reporting by Kevin Drawbaugh; Editing by Bill Trott)


Report typos and corrections to: [email protected].
READ COMMENTS - JOIN THE DISCUSSION
Continue Reading

Breaking Banner

Federal judge halts Trump administration trying to tamper with New Jersey ballot mail delivery

Published

on

President Donald Trump's administration too the state of New Jersey to court trying to stop the state from mailing ballots to voters in the state. But the federal judge in the case put an end to Trump's attempts to stop voting by mail."A federal judge just issued an order in our case halting the Trump Administration's efforts to interfere with mail delivery in advance of the election. We WILL have a free and fair election," tweeted Attorney General Gurbir Grewal on Sunday.

https://twitter.com/NewJerseyOAG/status/1310313813418352640

New Jersey Gov. Phil Murphy signed an executive order in August that would make the 2020 election primarily a vote-by-mail election similar to their July primary amid the pandemic. There will still be about 50 percent of polling locations open on Election Day for people who can't get ballots by mail for whever reason.

Continue Reading

Breaking Banner

New book details the way Russians funneled money through Trump’s real estate empire using a money laundering middleman

Published

on

In a new book, investigative reporter Tom Burgis details the shocking ways in which corrupt leaders used Russian "businessman" Felix Sater to conduct sketchy deals, including ones for President Donald Trump.

According to the Daily Beast, Kleptopia: How Dirty Money is Conquering the World reports the "terrifying" and true tale of overwhelming corruption, "clandestinely fusing their business interests, and forming alliances."

While corrupt leaders have spent decades "guzzling their nations' wealth," the rest of the world is struggling to keep such lawlessness in check.

Continue Reading
 

2020 Election

Lindsey Graham is in ‘deep trouble’ as he focuses on doing Trump’s bidding: report

Published

on

According to two polls out of South Carolina, Sen. Lindsey Graham (R) is either trailing or barely hanging on with Senate seat on the line in November's election.

Forbes reports that Democratic challenger Jaime Harrison is trailing Graham by one point (45% to 44%) in a CBS news/YouGov poll of likely voters, and an internal poll from Harrison's campaign shows the incumbent Republican trailing 43% to 45%.

Continue Reading
 
 
Democracy is in peril. Invest in progressive news. Join Raw Story Investigates for $1. Go ad-free. LEARN MORE