President Obama presented proposals in order to crack down on overseas tax havens. Obama claims that these oversea tax havens are costing tax payers “tens of billions of dollars a year." One of the key changes would restrict companies from deferring the payment of taxes on profits earned overseas. Administration officials stated, “The plan also would keep firms from taking deductions against their taxes by inflating the amount of foreign taxes they paid.” Obama also claims he is aiming to take away the competitive advantage for companies that invest and create jobs overseas, working to replace their tax advantages with incentives to produce jobs in the U.S. He plans to rise of 200 billion dollars in 10 years.
Double taxation to US global business is only going to benefit our foreign competitors. If Obama continues on with this he could put many American corporations at a strong disadvantage. American corporations use global strategies (offshore tax havens) in order to remain competitive in the industry. Tax foreign profits of our corporations and you just cut our ability to compete. By changing these rules, Obama will again be putting US companies at a greater competitive disadvantage.