Elections Have Consequences

A common sense, novel idea from a Democratic president..."business," naturally, is not happy.

Washington -- President Obama's plan to crack down on what he called abuse of overseas tax loopholes was met Monday with quick and unusually sharp opposition from big business, threatening to produce the administration's first major confrontation with a broad segment of corporate America.
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The proposed crackdown consists of two main proposals. The first targets wealthy people who use foreign tax havens such as the Cayman Islands to hide resources from the Internal Revenue Service.

The second proposal would change the way multinational corporations are able to deduct expenses incurred in foreign countries to reduce or avoid U.S. taxes -- a practice Obama said encourages the shifting of jobs overseas.

The president described the issue as one of simple fairness.

The goal, he said, is to end a "tax scam" by shutting down overseas tax havens that let U.S. multinational corporations and some individual taxpayers avoid paying U.S. taxes while ordinary Americans take up the slack.

"Nobody likes paying taxes, particularly in times of economic stress," Obama said. "And yet, even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs."