loopholes Archives

President’s Weekly Address – Ending Tax Loopholes For Tax Evaders Like Walgreens

In this week’s address, president Obama called on congress to close the tax loophole that allow some American companies to adopt the leaching mentality. The leachers sell their products to the American people, collect huge amounts in profit, but avoid paying taxes on their income by claiming overseas tax status.

Walgreens, the company that calls itself “the pharmacy America trusts,” is one of these companies, currently considering moving their operations to foreign shores to avoid paying taxes here in America.

The President;

Even as corporate profits are as high as ever, a small but growing group of big corporations are fleeing the country to get out of paying taxes. They’re keeping most of their business inside the United States, but they’re basically renouncing their citizenship and declaring that they’re based somewhere else, just to avoid paying their fair share.

I want to be clear: this is only a few big corporations so far. The vast majority of American businesses pay their taxes right here in the United States. But when some companies cherrypick their taxes, it damages the country’s finances. It adds to the deficit. It makes it harder to invest in the things that will keep America strong, and it sticks you with the tab for what they stash offshore. Right now, a loophole in our tax laws makes this totally legal – and I think that’s totally wrong. You don’t get to pick which rules you play by, or which tax rate you pay, and neither should these companies.

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This Is One Corporate Tax Cut Republicans Will Oppose

Congressional Republicans have been calling for less taxes on Corporations. Doing this they claim, would stimulate more hirings, thus more jobs. Well the President has listened to their calls and today, the administration announced a plan to reduce the Corporate tax rate from 35% to 28%.

“Obama’s plan would be part of a larger effort to overhaul the U.S. tax system and it dovetails with Obama’s call for raising taxes on millionaires and maintaining current rates on individuals making $200,000 or less.

“While the 35 percent nominal corporate tax rate ranks among the highest, deductions, credits and exemptions allow many corporations to pay taxes at a much lower rate.

“Under the framework proposed by the administration, the rate cuts, closed loopholes and the minimum tax on overseas earning would result in no increase to the deficit.

“That means that many businesses that slip through loopholes or enjoy subsidies and pay an effective tax rate that is substantially less than the 35 percent corporate tax could end up paying more under Obama’s plan. Others, however, would pay less while some would simply benefit from a more simplified system.”

Sounds like a win win situation. Republicans get their Corporate tax cuts and President Obama get to close corporate loopholes. But don’t expect anything to get done, as Republicans will not agree to do anything this president proposes even if the proposal is one of their own. And ending Corporate loopholes is not something Republicans’ to-do list.