As promised in his campaign, U.S. President Obama has initiated steps to make it tough for U.S. companies that create jobs in Bangalore while screwing American employees in Buffalo (a dying city in upstate New York).
Yesterday, Obama set the ball rolling for reforming the U.S. tax code that currently rewards companies for shipping jobs offshore or transferring profits to overseas tax havens.
[M]ost Americans meet their responsibilities because they understand that it’s an obligation of citizenship, necessary to pay the costs of our common defense and our mutual well-being.
And yet, even as most American citizens and businesses meet these responsibilities, there are others who are shirking theirs. And many are aided and abetted by a broken tax system, written by well-connected lobbyists on behalf of well-heeled interests and individuals. It’s a tax code full of corporate loopholes that makes it perfectly legal for companies to avoid paying their fair share….it’s a tax code that says you should pay lower taxes if you create a job in Bangalore, India, than if you create one in Buffalo, New York.
….I’m announcing a set of proposals to crack down on illegal overseas tax evasion, close loopholes, and make it more profitable for companies to create jobs here in the United States.
For years, we’ve talked about ending tax breaks for companies that ship jobs overseas and giving tax breaks to companies that create jobs here in America.Â That’s what our budget will finally do.Â We will stop letting American companies that create jobs overseas take deductions on their expenses when they do not pay any American taxes on their profits.Â And we will use the savings to give tax cuts to companies that are investing in research and development here at home so that we can jump start job creation, foster innovation, and enhance America’s competitiveness.
– President Barack Obama at the White House, May 4, 2009