Carrying out one of his campaign promises, President Obama has announced plans for reforms to the U.S. tax code, which are targeted at the tax incentives given to companies who create jobs overseas and overseas tax havens. The new reforms are estimated to add $210 billion in revenue currently lost from taxes currently being avoided under the current practices.
Obama’s plan also includes 800 additional federal agents to enforce the tax code. The president’s proposal would eliminate some tax deductions for companies that earn profits in countries with low tax rates, as well as making it a vioaltion of U.S tax laws for U.S. citizens to use tax havens in the Bahamas or Cayman Islands.
Business leaders have been highly critical of the new plans and claim they will hurt the U.S. economy. The Netherland, Ireland, and Bermuda have been named as tax haven countries. The U.S. government is currently negotiating to revise its tax treaty with Switzerland, another country criticized as a tax haven.
Source: http://jurist.law.pitt.edu/paperchase/2009/05/obama-administration-announces-plans-to.php
Tags: tax avoidance, tax havens
