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Firms Face New Tax Curbs
Wall Street Journal ^ | May 4, 2009 | John D. McKinnon and Jesse Drucker

Posted on 05/04/2009 5:21:03 AM PDT by reaganaut1

The Obama administration will roll out details Monday of what aides are calling a far-reaching crackdown on offshore tax avoidance, targeting many U.S.-based multinational corporations and wealthy individuals.

President Barack Obama will flesh out a proposal included in his February budget blueprint seeking to curb the practice of parking foreign earnings in offshore tax havens indefinitely. By some estimates, $700 billion or more in U.S. corporate earnings have accumulated in overseas accounts in recent years.

The plan to be announced Monday will go further. It aims to change the legal treatment of offshore subsidiaries and structures that companies have used to avoid not only U.S. taxes, but taxes in other developed countries as well.

In addition, the administration will strive to tighten rules that have encouraged thousands of Americans to open offshore bank accounts in an effort to duck U.S. taxes. The plan would increase information reporting and tax withholding as well as penalties, and make it harder for foreign account-holders to win cases in court. The administration promised new enforcement tools to crack down on tax-haven abuse.

"What we really have is a system that is in many ways broken," a senior administration official said Sunday, one that "allows people to play games...to almost completely avoid paying taxes on active foreign earnings."

The sweep of the administration's plan took some tax experts by surprise, and foreshadows potential fights with big businesses later this year over some of their most cherished breaks, particularly as Congress looks for revenue to pay for new initiatives.

"There absolutely will be" opposition from business, particularly if the administration doesn't allow a suitable adjustment period, said Phil West, a lawyer with Steptoe & Johnson LLP, who was international tax counsel for the Treasury Department under President Bill Clinton.

(Excerpt) Read more at online.wsj.com ...


TOPICS: Breaking News; Business/Economy; News/Current Events
KEYWORDS: atlasshrugged; businesstaxes; corporateincometax; multinationals; taxes; taxincreases
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Obama's tax increases on business, his energy taxes and regulations, and his labor agenda (card check) will encourage businesses to move their headquarters and their operations overseas. Congress will fulminate, as it did in 2002 over the case of Stanley Tool Works .

The corporate tax code is complicated enough that there probably are loopholes to be closed, but this should be done simultaneously with lowering tax rates. The Dems are just looking for grab money for their agenda.

1 posted on 05/04/2009 5:21:04 AM PDT by reaganaut1
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To: reaganaut1; All

“”There absolutely will be” opposition from business...”

Gee, ya think?

If you’d do away with the confiscatory tax policy, businesses would actually STAY IN AMERICA.

Economics 101: Whatever activity you levy a tax on, you will get less of that activity.

Therefore businesses will find a way to avoid this tax...keeping Obama and Co. from reaping any benefit.


2 posted on 05/04/2009 5:27:41 AM PDT by TheRobb7 (Has "Movement Conservatism" been reborn...or stillborn? It's up to us.)
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To: reaganaut1

Long Live the Welfare State!


3 posted on 05/04/2009 5:29:45 AM PDT by GOPGuide
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To: reaganaut1

How will Wall Street respond to these changes?


4 posted on 05/04/2009 5:32:22 AM PDT by Notasoccermom
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To: reaganaut1

Beware these firms don’t decide to ‘park’ their headquarters right out of America.


5 posted on 05/04/2009 5:32:47 AM PDT by Carley (OBAMA IS A MALEVOLENT FORCE IN THE WORLD)
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To: TheRobb7
Well, just look for some companies to move their home operations to more tax friendly countries. Think if a company like ExxonMobil moves all operations overseas. With the loss of jobs included it would be over 1 Trillion in lost tax revenue. Once a company like that moves, it will not return.
6 posted on 05/04/2009 5:38:50 AM PDT by Angry_White_Man_Syndrome (I'm Okies love Dubya 2's "other half")
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To: Angry_White_Man_Syndrome

Or the foreign arm simply splits off.


7 posted on 05/04/2009 5:42:17 AM PDT by HiTech RedNeck (Beat a better path, and the world will build a mousetrap at your door.)
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To: reaganaut1
Fortune shifted Tyco from its "US" list to its "global" list two years ago.
If the flight to overseas tax shelters continues, Fortune may have to change its rules, classifying a company according to where it gets most of its revenues rather than its home of incorporation, Mr. Cacace says

And there it is. - We are hiding the fact that America is producing less and less as Socialist tax programs forces real industry to leave America.

Does anyone know anything really produced here anymore?
Most heavy industry is gone. - killed by union demands and endless government policies that make it cheaper to make steel, for example, and ship it halfway around the world than to manufacture it here.

Stanley Tools is gone. Great job Congress.

This is so egregious that it has to be the agenda planned all along. - Nobody could be this consistently stupid over 5 decades as industry flees and immigration soars.

Anyone who does not see where this is going is just not looking.

8 posted on 05/04/2009 5:43:50 AM PDT by bill1952 (Power is an illusion created between those with power - and those without)
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To: reaganaut1

I think this is posturing, performing for the choir. Congress, especially the senate will not kill their constituents business. The off shore money is foreign profit many think is not taxable anyway.


9 posted on 05/04/2009 5:48:14 AM PDT by bert (K.E. N.P. +12 . Crucify ! Crucify ! Crucify him!!)
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To: reaganaut1
Will the Kennedy's have to pay their taxes now for their offshore accounts? Hint to Obama: Bahamas. Not holding my breath.
10 posted on 05/04/2009 6:19:26 AM PDT by w1andsodidwe (Jimmy Carter(the Godfather of Terror) allowed radical Islam to get a foothold in Iran.)
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To: TheRobb7

Less than 10 percent chance this will pass the house and senate. Add this idea to the cap and trade, gun confiscation, passenger train initiative, etc. junk pile.


11 posted on 05/04/2009 6:21:28 AM PDT by Eric in the Ozarks
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To: reaganaut1

Look for “Internet use” and “Internet sales” taxes too.


12 posted on 05/04/2009 6:21:58 AM PDT by Mad_Tom_Rackham (What did Obama's Teleprompter know, and when did it know it...)
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To: bert
Congress, especially the senate will not kill their constituents business.

Maybe you should also let everybody know how long you've been living in Dreamland....

Whenever they manage to get Franken sworn in, the only "constituents" that will count is their prime contributors.

Little issues like voting "correctly" are sure to be addressed before too much time passes, so the rest of us can just assume our righteous place as a disenfranchised part of the revenue stream.

13 posted on 05/04/2009 6:27:41 AM PDT by Unrepentant VN Vet
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To: reaganaut1; Man50D
Another great reason to adopt the FairTax. See www.fairtax.org.
14 posted on 05/04/2009 6:40:28 AM PDT by foxfield
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To: foxfield
Another great reason to adopt the FairTax. See www.fairtax.org.

And...limit ALL of these assholes to 2 terms! Just like the prez!

15 posted on 05/04/2009 7:15:35 AM PDT by unixfox (The 13th Amendment Abolished Slavery, The 16th Amendment Reinstated It !)
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To: reaganaut1

I recommend they move to Ireland, where the corporate tax rate is 12.5%.


16 posted on 05/04/2009 7:21:35 AM PDT by ScottinVA (Impeach President Soros!!!)
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To: reaganaut1
Closing the offshore tax havens, along with going after the secret bank accounts in Switzerland, are NOT ends in themselves.

They are necessary steps that must be in place prior to massive wealth seizure. Before the socialists can confiscate private property, they must FIRST eliminate all the hiding places.
17 posted on 05/04/2009 7:38:45 AM PDT by atomicweeder
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To: reaganaut1

In the finest Obama Admin tradition, it will probably be another 1,000 page document that the mind-numbed Congress & Senate will vote on without reading it as usual.

Probably will have all sorts of unnoticed little items from making Chave..er Obama El Presidente For Life, to jailing all domestic terrorists such as U.S.military veterans and Republicans, to giving instant citizenship and voting rights to all illegals, whether they are currently in the USA or not here yet.

Sorry for the cynicism, but the Obama Regime is proving to be the most corrupt and despotic Admin ever. The 4th Reich, here we come.


18 posted on 05/04/2009 7:41:10 AM PDT by OldArmy52 (Mainstream Media cheered: Ascension of Castro, Chavez and now Obama.)
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To: Unrepentant VN Vet

......Whenever they manage to get Franken sworn in, the only “constituents” that will count is their prime contributors. ......

Which happen to be those same corporations with repatriated profits operating under tax laws formulated and reformulated by the Senate


19 posted on 05/04/2009 8:06:51 AM PDT by bert (K.E. N.P. +12 . Crucify ! Crucify ! Crucify him!!)
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To: reaganaut1

“The Obama administration will roll out details Monday of what aides are calling a far-reaching crackdown on offshore tax avoidance,...”

Panama just elected its new president yesterday. We are very pleased. He is a mature, wealthy business man. Ricardo Martinelli was educated in the U.S. He owns many supermarkets. He is a multimillionaire entering the presidency and not the other way around.

He will not hesitate to tell that cheeky Kenyan bastard to go to hell and to use the Horn to go from one coast to the other. I would. The heck with treaties.


20 posted on 05/04/2009 8:08:41 AM PDT by Gatún(CraigIsaMangoTreeLawyer)
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