ive President Obama credit, said The New York Times in an editorial, for at least trying to stop some of the biggest and most profitable U.S. companies from shortchanging the Treasury on taxes. In 2004, U.S. multinationals paid only $16 billion in U.S. taxes on $700 billion in foreign earnings, for example. But Obama's tax tinkering doesn't go far enough—let’s hope this is just a “warm-up act.”
Obama is right that the current tax system is “clumsy,” said The Wall Street Journal in an editorial, but his solution is “antigrowth, job-destroying, protectionist,” and “unlikely” to raise the $210 billion he predicts. It would be better for U.S. companies, and ultimately U.S. coffers, to slash our “uncompetitive” 35 percent corporate tax rate and remove loopholes.
It does seem odd that Obama would pick a “huge fight” over tax havens, with so much else on his plate, said Robert Reich in Talking Points Memo. But those other plans, especially universal health insurance, require revenue. And along with more tax income, Obama’s “crackdown” is also a “bargaining chip” he can use to get big corporations onboard for health reform.
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