President Obama announced steps to pursue tax evaders and go after offshore tax shelters. As Chip Reid reports, he also vows to fix a tax code that encourages U.S. companies to send jobs overseas.
>> Chip: The President said today it's time to fix a broken tax code that encourages U.S. corporations to send money and jobs overseas.
>> Barrack: 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.
>> Chip: The White House gives this example, 2 U.S. companies decide to build a new factory company A builds in the U.S. and is taxed 35% on profits; company B builds in a foreign country where the tax rate is 10% it has to pay the other 25% only when it brings its profits back to the U.S. But many companies never do instead reinvesting the money overseas. Promising to end that practice was a major applause line for the President on the campaign trail. The President today also proposed cracking down on wealthy individuals and corporations that avoid taxes by putting money in foreign tax havens; this building in the Cayman Islands is home to nearly 19,000 corporations.
>> Barrack: Either this is the largest building in the world or the largest tax scam in the world and I think the American people know which it is.
>> Chip: But Marty Regalia assumed spelling of the U.S. Chamber of Commerce says the President's proposals are a $210 billion tax grab to pay for bigger government.
>> Marty: We're gonna penalize those companies simply because they are successful and administration needs money.
>> Chip: In a letter to congress 200 major U.S. corporations say higher taxes on foreign operations will impair the global competitiveness of U.S. companies resulting in job losses here at home. On Capitol Hill critics warn that if taxes on U.S. multi-nationals go up more will suffer the fate of Budweiser, Lucent Technologies and John Hancock Financial Services all were bought by foreign corporations. For the President getting this plan through congress is not going to be easy business lobbyists are expected to pull out all the stops in an effort to defeat it and on Capitol Hill today even some top democrats gave it a lukewarm reception, Jeff.
>> Jeff: Alright, Chip Reid assumed spelling at the White House, Chip thank you tonight.
Silence
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