by William Teach | February 2, 2015 6:57 am
This makes it pretty darned clear that Obama is simply looking to pick a fight with not just Congressional Republicans, but all Republicans and conservatives. The only other option is that he is completely divorced from reality, that he’s a total political hack, that he’s still out of ideas, and has absolutely no idea that he and his Party go thumped during the midterms
(Fox News) President Obama will on Monday give Congress his $4 trillion spending plan for fiscal 2016 that includes a request for billions of dollars in much-needed public works projects — an idea that has bipartisan support but little backing for the proposed tax increases to fund such efforts.
Obama will propose a six-year, $478 billion public-works program for highway, bridge and transit upgrades, with half of it to be financed with a one-time, 14 percent tax on U.S. companies’ overseas profits.
The tax would be due immediately. Under current law, those profits are subject only to federal taxes if they are returned, or repatriated, to the U.S., where they face a top rate of 35 percent. Many companies avoid U.S. taxes on those earnings by simply leaving them overseas.
That idea is going absolutely nowhere. It will never ever pass. Even a goodly chunk of Democrats have to admit that this is a Bad Idea, one which could see even more companies move their main country registration to countries other than the U.S. prior to this “one time tax” kicking in. Especially since corporate leaders understand that if happens once, it can certainly happen again, to the point of being fully embedded in the law for every year (more on this in a moment).
But, really, this is most likely a poison pill, meant to create that aforementioned fight with the GOP, who will deem this as a non-starter, allowing Obama to demagogue the issue out on the campaign trail. The only other assumption is that Obama’s a fool.
The tax is part of a broader administration plan to cut corporate tax breaks and increase taxes on the country’s highest wage-earners to pay for projects to help the middle class.
Yet, what it would do would is, again, send more corporations headed to the door. Funny how Obama takes advantage of every tax break on the books to lower his own tax burden every year when he pays his own taxes, eh? As for infrastructure, what should generally be an easy notion to deal with becomes a massive fight, thanks to Obama’s intransigence.
Oh, wait, did the AP (it’s an AP article, posted at Fox News) mention something about the tax being one time?
At issue is how to get companies to bring back some of their foreign earnings to invest in the United States. The current 35 percent top tax rate for corporations in the United States, the highest among major economies, serves as a disincentive and many U.S. companies with overseas holdings simply keep their foreign earnings abroad and avoid the U.S. tax.
Under Obama’s plan, the top corporate tax rate for company profits earned in the U.S. would drop to 28 percent. While past foreign profits would be taxed immediately at the 14 percent rate, going forward new foreign profits would be taxed immediately at 19 percent, with companies getting a credit for foreign taxes paid.
This is a plan guaranteed to send companies running for the door to moving their registration to other countries.
What the GOP should do is simply put Obama’s budget up for a vote in both the House and Senate. Say “here it is. Vote”. Put Democrats on record. His past budgets have failed miserably.
Crossed at Pirate’s Cove. Follow me on Twitter @WilliamTeach.
Source URL: https://rightwingnews.com/barack-obama/obama-budget-pushes-overseas-corporate-profit-tax/
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