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President Obama announces plan to close tax loopholes, offshore tax shelters

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    President Obama announces plan to close tax loopholes, offshore tax shelters

    WASHINGTON - President Obama pledged Monday to crack down on American companies and individuals who hide millions of dollars in offshore tax havens.
    In a move likely to get the backing of a majority of Americans who don't hide their assets overseas, Obama urged Congress to approve legislation closing loopholes that could produce $210 billion in tax revenues over the next 10 years.

    "The steps I am announcing today will help us deal with some of the more egregious examples of what is wrong with our tax code," Obama said, joined by Treasury Secretary Timothy Geithner at the White House.
    U.S. companies are currently allowed to "defer" tax payments to the federal treasury if they reinvest taxable profits in their foreign subsidiaries. Obama says it's an unfair practice - and wants it to be the first of several tax reforms enacted on his watch.
    "The way to make American businesses competitive is not to let some individuals and businesses dodge their responsibilities and let ordinary Americans pick up the slack," Obama said.

    "It is the down payment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations," he added.
    And he wants companies to create more U.S. jobs.

    He called for eliminating tax breaks for outsourcing employment to low-wage countries like India and the Philippines - a head-scratching current practice.
    "It's a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York,"
    Obama said.
    The President wants to reward companies that invest in the U.S. by extending a research and experimentation tax credit worth $74.5 billion in tax breaks over 10 years.

    It is not a slam-dunk proposal, however. Obama expects a major fight with corporations, lobbyists and their supporters in Congress.
    "This issue is about jobs in America and the competitiveness of American companies.
    Deferral has been mischaracterized as a 'tax break' but is actually a vital mechanism providing relief for American businesses from double taxation," said Chamber of Commerce Chief Economist Marty Regalia.

    "Tax increases that hurt U.S. companies' global competitiveness hurts U.S. workers here at home. A huge tax hike on U.S. employers is not the way to stimulate our economy. Congress should reject this approach," Regalia added.
    The Chamber of Commerce and about 200 other organizations, lobbies and corporations have signed a petition asking Congress to kill the plan.

    Read more: "President Obama announces plan to close tax loopholes, offshore tax shelters" - President Obama announces plan to close tax loopholes, offshore tax shelters

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    That is a very nobel concept, one that should have been enacted a long time ago. But he has to realise this is the majority of the people in Washington and your crooked CEO's.

    Obama's crossing the line now....He may be on his way to being eliminated!

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    Quote Originally Posted by IronAddict View Post
    He may be on his way to being eliminated!
    Eliminated by the 'Silent Majority'?
    "If you think you are too small to make a difference
    you have never spent the night with a mosquito."
    ~ Dali lama


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    This idiocy will do nothing but drive the companies completely over-seas rendering their domestic employees unemployed or taking them overseas as well.

    The U.S. has one of the highest corporate tax rates in the world @ 35%. The better idea would be to lower the corporate tax here so that businesses would have an incentive to create jobs and profits here in the U.S.

    Punishing and taxing job creators is not the way to create more jobs. However, this move will go over well with the idiots who don't understand economics. aka Obama voters.

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    Quote Originally Posted by brogers View Post
    This idiocy will do nothing but drive the companies completely over-seas rendering their domestic employees unemployed or taking them overseas as well.

    The U.S. has one of the highest corporate tax rates in the world @ 35%. The better idea would be to lower the corporate tax here so that businesses would have an incentive to create jobs and profits here in the U.S.

    Punishing and taxing job creators is not the way to create more jobs. However, this move will go over well with the idiots who don't understand economics. aka Obama voters.
    For once, I agree. He should be creating incentives instead of backing them into a corner.

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    Quote Originally Posted by Moondogg View Post
    For once, I agree. He should be creating incentives instead of backing them into a corner.
    I concur.

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    Coca-Cola, Oracle, Intel Use Cayman Islands to Avoid U.S. Taxes

    May 5 (Bloomberg) -- Seagate Technology, the world’s largest maker of hard disk drives, is headquartered in Scotts Valley, California. Yet the documents it files with the Securities and Exchange Commission list its address on South Church Street in George Town, the capital of the Cayman Islands.

    Seagate is just one of the companies that may be affected by President Barack Obama’s proposal yesterday to raise about $190 billion over the next decade by outlawing techniques used by U.S. companies in offshore locations to avoid paying taxes. While the U.S. corporate tax rate is 35 percent, Seagate paid an effective tax rate of 5 percent in the year ended June 2008, according to data compiled by Bloomberg.

    The Caymans have no corporate income tax for companies incorporated there. The Caribbean island has helped scores of U.S. companies, including Coca-Cola Co. and Oracle Corp., to legally avoid billions in tax payments to the U.S. government, says U.S. Senator Byron Dorgan.

    “Our Main Street businesses are working hard during this economic downturn to pay their fair share of taxes,” says Dorgan, 66, a North Dakota Democrat. “Some of the country’s largest corporations are using these loopholes to avoid paying their fair share of taxes. It is my hope that the Congress will quickly take action to pull the plug on tax breaks that subsidize runaway plants that move U.S. jobs overseas.”

    Largest Companies

    One quarter of the 100 largest contractors with the U.S. federal government, including Altria Group Inc. and Tyco International Ltd have had subsidiaries in the Caymans, according to a study by the Government Accountability Office. At least 10 of the 30 companies listed in the Dow Jones Industrial Average have had units with addresses in the Caymans.

    As of November 2007, 378 U.S. publicly traded companies had at least one significant subsidiary in the Cayman Islands, a GAO study found. Altria, Tyco, Coke and Oracle still have subsidiaries in the Caymans, according to their most recent SEC filings. Seagate lists its headquarters in Grand Cayman.

    One of the Dow 30 companies using offshore sites to reduce its U.S. taxes is Santa Clara, California-based Intel Corp., the world’s largest chipmaker.

    Intel’s then vice president of tax, licensing and customs, Robert Perlman told the U.S. Senate Finance Committee in March 1999 that Intel would have been better off incorporating in the Cayman Islands when it was founded in 1968.

    “Our tax code competitively disadvantages multinationals simply because the parent is a U.S. corporation,” Perlman testified.

    ‘The Details’


    Intel spokesman Chuck Mulloy said yesterday his company is rethinking its tax strategy. “We’re studying the Obama proposal,” Mulloy said. “Particularly with taxes, the devil’s in the details.”

    Seagate spokesman Brian Ziel said yesterday that his company incorporated in the Caymans to reduce its taxes. “The competitive benefits relate both to taxes saved on certain income earned outside of the United States and the ability to efficiently deploy assets around the globe to remain competitive,” he said.

    Eighty-five percent of Seagate’s employees work outside the U.S. and more than 70 percent of the company’s revenue comes from sales overseas, Ziel said.

    “Officially, our administrative headquarters is in the Caymans,” Ziel said. “That’s how it’s listed in our annual report.”

    18,857 Cayman Corporations

    Altria spokesman Bill Phelps said his company is in the process of dissolving its Cayman subsidiary. Coke spokeswoman Kerry Kerr said, “We don’t comment on tax strategies, for competitive purposes.”

    Tyco’s Paul Fitzhenry and Oracle spokeswoman Karen Tillman didn’t return calls requesting comment.

    A five-story office building on South Church Street in the Caymans serves as the official address for 18,857 corporations. That building, called Ugland House, is listed in SEC filings as Seagate’s headquarters. About half those Cayman companies had billing addresses in the U.S., according to a 2008 GAO study.

    President Obama referred to Ugland House yesterday.

    “On the campaign, I used to talk about the outrage of a building in the Cayman Islands that had over 12,000 businesses claim this building as their headquarters,” Obama said. “And I’ve said before, either this is the largest building in the world or the largest tax scam. And I think the American people know which it is: The kind of tax scam that we need to end.”

    Maples and Calder, the law firm that occupies all of Ugland House in Grand Cayman, said Obama is mistaken.

    No Financial Misconduct

    “I’m sorry to disappoint anyone, but our office is neither the largest building in the world nor a center of financial misconduct,” said Charles Jennings, joint managing partner of Maples and Calder.

    “Having a registered office address in the Cayman Islands is driven by commercial considerations, not by tax avoidance,” Jennings said. “It allows companies to raise capital and conduct global business.”

    The firm, which provides services for the corporations that use its address, has incorporated more than 6,000 new companies over the past five years. Back in 2004, the building served as home to 12,748 companies using the same address in the Caymans, a British crown colony 150 miles south of Cuba.

    Del Monte Fresh Produce Inc., whose corporate headquarters is in Coral Gables, Florida, lists another address -- Walker House on Mary Street in George Town, Grand Cayman -- in its SEC filings. That’s around the corner from Ugland House.

    Del Monte’s effective tax rate for 2008 was 3 percent, up from 1 percent the year before. Del Monte spokeswoman Vidya Samsundar had no immediate comment on why the company is incorporated in the Caymans.

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    Seagate spokesman Brian Ziel said yesterday that his company incorporated in the Caymans to reduce its taxes. “The competitive benefits relate both to taxes saved on certain income earned outside of the United States and the ability to efficiently deploy assets around the globe to remain competitive,” he said
    .

    Can I use that address also, I could use it to efficiently deploy ass around the globe come vacation time.

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    Quote Originally Posted by brogers View Post
    This idiocy will do nothing but drive the companies completely over-seas rendering their domestic employees unemployed or taking them overseas as well.

    The U.S. has one of the highest corporate tax rates in the world @ 35%. The better idea would be to lower the corporate tax here so that businesses would have an incentive to create jobs and profits here in the U.S.

    Punishing and taxing job creators is not the way to create more jobs. However, this move will go over well with the idiots who don't understand economics. aka Obama voters.
    Fuck them, these assholes have been raping and pillaging, while holding their hands out for more.... They can move to the moon for all I care, this country is being torn apart by corporations and their unscrupulous deceptions, the only way to clean it up is to either drive them overboard or request they help shore up the hull, rats are always the first to abandon a sinking ship......
    Coarse edged youth, the irish pendants string from their smiles
    not yet plucked as to slacken the seams
    and drag down the features of age,
    no folds or creases from unkempt wear
    eyes of tranquilty, crystalline-beads
    no sign of despair in their hair, nor their hearts
    but oh they have yet to be experienced and that makes aging so very worth it...ML circa2012

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    Why is this so hard to see....

    Why would you argue for big business ?

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    Quote Originally Posted by IronAddict View Post
    Why is this so hard to see....

    Why would you argue for big business ?
    Brogers doesn't really say much about himself but it wouldn't surprise me if he owned a big company.

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    Quote Originally Posted by IronAddict View Post
    Why is this so hard to see....

    Why would you argue for big business ?
    Because unfortunately they have a lot of effect on the US economy. If they feel they are getting fucked over they could easily re-locate to an LEDC e.g. India, Taiwan, China ect. where their running costs will be much lower, and in many cases the governments of these countries which actually bend and change laws to accommodate these big business.

    That’s why you can’t push them too far.

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    Quote Originally Posted by brogers View Post
    This idiocy will do nothing but drive the companies completely over-seas rendering their domestic employees unemployed or taking them overseas as well.

    The U.S. has one of the highest corporate tax rates in the world @ 35%. The better idea would be to lower the corporate tax here so that businesses would have an incentive to create jobs and profits here in the U.S.

    Punishing and taxing job creators is not the way to create more jobs. However, this move will go over well with the idiots who don't understand economics. aka Obama voters.
    I always wonder why such "political geniuses' like yourself are not politicians in Washington, I guess you're too smart for that.





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    Quote Originally Posted by Prince View Post
    I always wonder why such "political geniuses' like yourself are not politicians in Washington, I guess you're too smart for that.
    There's no genius required to come to that conclusion. Do you think that by increasing the costs incurred by businesses without increasing their revenue you will create more jobs? I think basic economics indicates the opposite will occur.

    Reducing the massive government taxation, regulation and entitlement (SS, Medicare) burdens companies currently have to deal with in the U.S. would be a better way to attract businesses to the U.S.

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    Quote Originally Posted by maniclion View Post
    Fuck them, these assholes have been raping and pillaging, while holding their hands out for more.... They can move to the moon for all I care, this country is being torn apart by corporations and their unscrupulous deceptions, the only way to clean it up is to either drive them overboard or request they help shore up the hull, rats are always the first to abandon a sinking ship......
    The country is being torn apart by the government, working in concert with certain corporations, picking and choosing the winners and losers, rather than letting the market decide.

    People often cited George Bush for mostly innocuous competitively bid and no-bid contracts with Kellogg Brown and Root, consider what Obama has done in his first few months as President. There's no talk of slowing down either. Maybe the newspapers are next? It's certainly been proposed in the Congress.

    The government is the enabler allowing bad corporations to operate. Otherwise, they would be forced to reorganize or go under.

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