Obama calls for an end to tax loophole

Published 12:00 am Friday, July 25, 2014

LOS ANGELES — President Barack Obama called Thursday for Congress to end a tax loophole that allows big corporations to designate a foreign country as their official address, avoiding American taxes while maintaining their presence in the United States.

In an appearance at a technical college meant to focus on job training, the president used unusually harsh language to describe companies that take advantage of the relocation practice, known as inversion. He said they were renouncing their American citizenship by “cherry-picking” the nation’s tax laws at the expense of ordinary taxpayers.

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“These companies are cherry-picking the rules, and it damages the country’s finances,” he said. “It adds to the deficit. It sticks you with the tab to make up for what they are stashing offshore.”

“I don’t care if it’s legal — it’s wrong,” he said, prompting the audience to boo the companies taking advantage of the practice.

Obama called on members of Congress to close the loophole even if they disagree with his broader calls for changes to the tax system, which would lower corporate rates and close several loopholes, including that one.

“You shouldn’t get to call yourself an American company only when you want a handout from the American taxpayers,” Obama said.

The legislative effort is unlikely to succeed in Congress, where Republicans have refused to consider the president’s tax proposals.

At a news conference Thursday, Speaker John Boehner criticized Obama’s economic record, saying that incomes have dropped during the president’s tenure, and that too many people are struggling to find work.

In an appearance at a Los Angeles fundraiser for the Democratic National Committee on Wednesday night, Obama criticized the Republicans for blocking efforts to improve the economy and for coming to the defense of big corporations that do not have the interest of average Americans at heart.

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