The Washington Post
President Barack Obama made a forceful case yesterday for stopping corporations from moving their headquarters overseas to avoid U.S. taxes, saying they were taking advantage of the American economic system and saddling the middle class with the bill.
These companies “renounce their citizenship, but get all of the rewards of being an American company,” Obama said at a news conference.
Obama praised regulations issued the day before by the Treasury Department aimed at making these so-called inversions, in which U.S. companies combine with foreign firms to reduce U.S. taxes, more difficult.
Tax avoidance is a global problem, Obama said, pointing to an enormous leak of documents from a Panamanian law firm that allegedly detail the offshore shell companies and tax shelters used by rich leaders around the world. “A lot of it is legal; that is exactly the problem,” he said.
The new Treasury Department rules come as the Obama administration has struggled to stem the tide of inversions. The regulations announced Monday were the administration’s third attempt to address the issue.
Despite the new rules, administration officials have continued to argue that stopping inversions will ultimately require congressional action. And business groups say inversions will continue to make financial sense as long as the U.S. corporate tax rate, 35 percent, remains the highest in the developed world.