Thread: Obama plans tax on US firms overseas to fix roads at home

1 February 2015 Last updated at15:17 ET

Obama plans tax on US firms overseas to fix roads at home

President Barack Obama will present his latest budget on Monday

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US President Barack Obama plans to close a tax loophole that allows US firms to avoid paying taxes on overseas profits, the White House says.

His 2016 budget will impose a one-off 14% tax on US profits stashed overseas, as well as a 19% tax on any future profits as they are earned.

The $238bn (£158bn) raised will be used to fund road projects in the US.

The proposal is one of the main components of Mr Obama's latest budget, due to be presented on Monday.

The spending plan, including the proposal on overseas profits, would require approval from the Republican-controlled Congress to be made law, something seen as unlikely.

Research firm Audit Analytics calculated last April that US firms in total have $2.1 trillion-worth of profits stashed abroad.

It found US conglomerate General Electric had the most profit stored overseas at $110 BILLION. Tech giants Microsoft and Apple and drugs companies Pfizer and Merck all featured in the top five.

No tax is currently due on foreign profits as long as they are not brought into the United States.

As a result some companies put their earnings in low tax jurisdictions and simply leave them there.

The White House said its plans for an immediate 14% tax would raise $238bn, which would be used to fund a wider $478bn public works programme of road, bridge and public transport upgrades.

"This transition tax would mean that companies have to pay US tax right now on the $2 trillion they already have overseas, rather than being able to delay paying any US tax indefinitely," a White House official said.

The official said that after this one-off tax, the 19% permanent tax firms would have to pay on overseas profits "would level the playing field, and encourage firms to create jobs here at home."

The tax rate is far lower than the current US top corporate tax rate of 35%.

http://www.bbc.com/news/business-31085912

Gee, you mean our companies and corporations fed up with being robbed of their treasuries by the IRS and the DemoQuacks failed income tax store their profits oversees? Really? Oh my. Well, why don't we stop robbing them, repeal the income tax, abolish the IRS so they'll bring all their profits and trillions back home to the US by passing the FairTax, HR 25 in the US House of Representatives and S 155 in the US Senate .... since 1999.

Would Americans rather than have Microsoft and General Electric back home with state of the art manufacturing facilies and all their money stored in US banks or H&R Block running ugly ads with Henry Block in that horrible bow tie clamoring for his billions to file your income taxes and Jackson-Hewitt taking up space in the aisleways of Walmart during tax season filing out tax returns for people too poor to file them? What kind of country do you want? The one we have with the failed and miserable income tax or one free of all this nonsense with a FairTax?

I think most Americans want Microsoft and GE back in the country and a sweet but firm "bye bye" to billionaire tax return filers.

FairTax Now! Stop the Nonsense!

www.fairtax.org

Judy Wrote:

What kind of country do you want? The one we have with the failed and miserable income tax or one free of all this nonsense with a FairTax?

The Fair Tax, while eliminating some of our current problems, would create other, even larger, problems. Nope, Fair Tax is definitely not the answer. Well, maybe it is if you list yourself among the wealthy.

Originally Posted by MW

The Fair Tax, while eliminating some of our current problems, would create other, even larger, problems. Nope, Fair Tax is definitely not the answer. Well, maybe it is if you are list yourself among the wealthy.

You got that right.

Originally Posted by MW

Judy Wrote:



The Fair Tax, while eliminating some of our current problems, would create other, even larger, problems. Nope, Fair Tax is definitely not the answer. Well, maybe it is if you are list yourself among the wealthy.

MW, the FairTax doesn't create any problems for anyone. Everyone from the poor to the middle class, from small businesses to large ones, have more disposable income, more choice in their expenditures of that income, and that benefits the economy for everyone in it, except illegal aliens who are excluded from the Rebate.

The 8.09% portion of the 23% FairTax earmarked by statute for Social Security and Medicare robustly funds Social Security and Medicare with a greater % of federal revenues than the present payroll tax system. The 14.91% of the 23% FairTax earmarked for General Revenue is more than enough to fund our government operations and welfare/entitlement programs and start paying down the national debt. The FairTax returns the power and control over our government back to the citizens of the United States and limits political tax talk to whether to run on reducing the General Revenue rate or raising it, which simplifies our elections.

The FairTax revenues at the 23% rate are a tax on the portion of the GDP sold here and grow as the GDP grows, and as the GDP grows and revenues increase, then most politicians will be discussing whether to reduce the rate or use the surplus to pay more of the national debt down more quickly. The FairTax basically ends special interest lobbying with respect to taxes.

The FairTax also levels the playing field for domestic producers competing with foreign imports because imports that end up being sold in the US either as complete items or as components or services used in products and services sold as finished goods at the retail level in the US will be subject to the same FairTax as domestic products and services.

The FairTax doesn't eliminate all existing federal taxes, only those taxes waged against income, the federal income tax for individuals and corporations, the payroll tax for employers and employees, capital gains tax for individuals and businesses, and the gift, estate, dividend and earned interest taxes (except for a portion allocated to the services involved in paying interest).

Other federal taxes that remain are gas taxes, which I think will eventually be phased out once the FairTax passes, excise taxes, tariffs, customs, duties, and other types of user fees and charges all remain intact. For example, on trade issues, imported goods and services would not only be charged the FairTax at the retail point of sale, they would also pay whatever tariffs and duties are in place on imports when they arrive at US ports of entry, which gives our domestic producers a comparative advantage, and corporations while relieved of all income based taxes, would still be subject to the federal excise tax on corporations which still allows those who wish to penalize our own companies and employers that are incorporated to try and do so. The "rich" would still pay excise taxes on their luxury and big ticket items and the FairTax on all their consumption, and tariffs and customs/duties on their imported products and services.

I so far can't see what it is that you're actually opposed to about the FairTax. I looked at Bruce Bartlett, one of the individuals one of your articles quoted who is opposed to the FairTax who has worked for the government for a number of years, basically his whole career, and he didn't even get the organization right that developed the FairTax and confused it with another organization associated with the Church of Scientology.

I took the time to review his comments in a couple of articles he wrote about the FairTax and he was just as confused by the legislation as he was by the organization who developed it. He rambles on about how workers who go home with their money are now taxed at the point of sale so the $200 a month, the figure he used, would be spent on FairTax when purchasing essential products so the benefit to them is zero. Well, not when they're eligible for a Rebate that reimburses them in advance for the $200. When they're reimbursed with the Rebate, it's more disposable income in their pockets than under the present system.

He was also strangely upset that adults in the household all received the larger Rebate credit and children were eligible for a much smaller amount and he didn't think this was fair. Well, children don't pay rent, their parents do, children don't make car payments, their parents do, so it makes perfect sense that the Rebate is larger for an an adult who actually provides the basics for the household including the house, whether there are children in it or not, and then have a smaller Rebate for the addition of children in the home to cover their personal essentials only, since the tax on the house and infrastructure of the household have already been Rebated to the parents responsible for it. This is the same with the difference between the personal deduction and dependent deductions under the income tax. So, he still doesn't understand the FairTax, because he doesn't even understand our existing income tax, because surprisingly he doesn't even understand the components and expense of a household well enough to understand the Rebate.

In one article, he states clearly in the beginning of it that the Rebate is equivalent to the personal deductions of an income tax, yes, that is correct, but then goes on later in the article to call the FairTax Rebate, "welfare", which is totally incorrect. It would be like telling every American who files an income tax return and claims a personal deduction and those for dependents that doing so is using "welfare". These are writings of a twisted mind, warped and confused by the realities of the FairTax and their own agendas. He's like the politician who claims he supports American workers while pushing for open borders and amnesty for illegal aliens. On the take somewhere or too addled in the brain to be someone that influences opinions in the United States.

There's nothing wrong with supporting an income tax over a national retail sales tax, but it's wrong to try to depict a national retail sales tax as something that will harm our country or cause larger problems when 45 state retail sales taxes prove otherwise. Some people like reporting to government about their activities and earnings and holdings and income. Some people like doing their income taxes with Turbo Tax or sitting in the aisleways of Walmart for someone to tell them how much refund they're getting back. And they're certainly entitled under present law to enjoy these activities. But as peculiar as that all is to me, efforts to cling to such shouldn't be criticizing another tax proposal that parallels the same state sales taxes they pay without a thought in 45 states without which there probably wouldn't be a Walmart for them to sit in while they await the news of the size of their refund, which isn't really a refund these days, it's tax credit welfare because most of it is tax credits for taxes they didn't pay to begin with.

In any event, I'll continue to respond to your articles and as always, we have the right to agree to disagree!

Have a great day, MW.

FairTax Now!

www.fairtax.org

Originally Posted by JohnDoe2

You got that right.

No, MW, does not have that right. The FairTax benefits everyone. There are no "larger problems" created by the FairTax, this is wrong and inaccurate, because it like any retail sales taxes currently charged in 45 states, creates no problems at all.

Judy wrote:

In any event, I'll continue to respond to your articles and as always, we have the right to agree to disagree!

I didn't provide an article, just responded to your comment. Maybe I'm wrong, but it seems like an unusally large amount of your responses to various posts are advertisements for the so-called Fair Tax. If you don't mind me asking, why are you pushing it so hard? I ask this question because anyone with the ability and tools to research the issue can see for themselves that the Fair Tax plan is not anywhere near being the solution that supporters of the plan would have us believe. There is a ton of information on the so-called Fair Tax plan out there. I would recommend that everyone with an interest in the topic do their own research.

Yep, we both agree that we are in very strong disagreement on this issue.

Originally Posted by Judy

No, MW, does not have that right. The FairTax benefits everyone. There are no "larger problems" created by the FairTax, this is wrong and inaccurate, because it like any retail sales taxes currently charged in 45 states, creates no problems at all.

Like you and I, I guess JohDoe2 is entitled to his opinion. Perhaps he arrived at his conclusion after doing a little research of his own. Just saying .......

Originally Posted by MW

. . . I would recommend that everyone with an interest in the topic do their own research . . .

This is important on all issues.

Originally Posted by MW

Judy wrote:



I didn't provide an article, just responded to your comment. Maybe I'm wrong, but it seems like an unusally large amount of your responses to various posts are advertisements for the so-called Fair Tax. If you don't mind me asking, why are you pushing it so hard? I ask this question because anyone with the ability and tools to research the issue can see for themselves that the Fair Tax plan is not anywhere near being the solution that supporters of the plan would have us believe. There is a ton of information on the so-called Fair Tax plan out there. I would recommend that everyone with an interest in the topic do their own research.

Yep, we both agree that we are in very strong disagreement on this issue.

Oh, I was referring to all the articles you posted in lieu of statements of your own, not necessarily in that one post, but all the other posts where you post the website writing of people opposed to the FairTax.

Oh yes, my posts are definitely advertisements for the FairTax legislation, the same as we advertise E-Verify legislation and so many other legislations that we support. I'm pushing it so hard for the same reason I push against illegal immigration, i. e., to fix our country, to improve our standard of living and restore our civil rights, liberty, jobs and wages, and to bring our industry and capital back home where they belong, to end tax credit welfare for illegal aliens and give our workers a comparative advantage, to simplify paying and collecting taxes and return the diversion of almost $300 billion a year in tax compliance costs to our real economy, to strip our politicians of these tax lobbying funds and manipulation over income tax and of course to end the 501 C 3 tax frauds that use tax exempt taxpayer money to fund lobbying activities on behalf of foreign persons, foreign businesses and foreign interests.

The FairTax stops the nonsense and problems created by the income tax system, the same way the legislations we support stop the nonsense of illegal immigration. I have a degree in International Relations with a minor in economics, so I've studied the US tax system academically since I was in college. I've worked for a major corporation and a state industrial development department, I've run a small business and worked as an independent contractor, so there's not been a day in my adult life, nor a business decision I've been involved with that wasn't skewed or thwarted by the implications of the federal income tax. I know first-hand from the inside that better choices and better decisions for everyone would have been made had there been a FairTax instead of an income tax.

I realize some people cling to the income tax to get whatever refund or tax credit welfare or thrill out of gaming the system it brings them, because they enjoy it and love the notion of a system that for the most part forces someone else in some other group to pay the taxes so you can avoid them, but that's like the cereal commercial, "Get Mikey to eat it", and I find no enjoyment from that myself. I also find horror at the business and employment decisions we force our companies to make as a direct result of the federal income tax.

Everyone has always known that a national sales tax was the best tax for our country, everyone of substance and character has known that since at least the 1970's. But the issue was figuring out a way to deal with the regressive nature of a sales tax by exempting this essential and that essential and by the end of the day, no one could figure out how to do that on a national level in a simple fair way. Then comes the FairTax guys, a bunch of economists who were hired for 3 years to study our economy from a tax standpoint, conducted thousands of interviews with all types of people, to arrive at a new tax system for our country. The result of their 3 year extensive work was the FairTax legislation. And the hurdle they overcame where no one prior had been able to, they achieved with the Rebate, a brilliant, simple solution to overcome the regressive nature of sales taxes.

The FairTax is the result of great work by really brilliant and selfless minds, is as perfect a new tax system that has or will ever be presented to the American People, and one day it will pass. But every year that goes by that it isn't passed just prolongs the date when good things can start happening again in our country and increases the damage being caused by the income tax.

Anyone who wants to cling to a tax system that costs our economy $300 billion a year in costs and productivity with which to comply, hasn't paid the bills even 1 year in its 102 year history, that's run all of our great companies to foreign locations while rewarding illegal aliens with thousands of dollars a year in tax credit welfare our government increase borrows to pay, and funds National Council of La Raza to fight for open borders, is something I ardently want repealed and replaced with a system that doesn't do all those bad things.

But thank you so much for your interest in why I am a FairTax Advocate. I suppose now I can ask you why you aren't one also?

FairTax Now!

www.fairtax.org