Obama tones down international corporate tax aims

By Reuters Staff
February 1, 2010

WASHINGTON, Feb 1 (Reuters) – President Barack Obama appeared to scale back his ambitious plan to close loopholes global companies use when accounting for taxes on profit earned overseas in his 2011 budget blueprint released on Monday.

Obama, who has used heated rhetoric to blast corporations that keep profits overseas to avoid U.S. tax, proposed changes that he said would raise $122 billion over a decade.

He mentioned the issue in his State of the Union address last week, saying: “To encourage these (energy and manufacturing companies) and other businesses to stay within our borders, it’s time to finally slash the tax breaks for companies that ship our jobs overseas and give those tax breaks to companies that create jobs in the United States of America.”

But the budget plan seems to tone down this effort when compared to a similar set of international tax loophole closers that last year he said would raise $210 billion over 10 years.

His original plan drew a lukewarm response from Congress, even from his fellow Democrats, many of whom took the position that changes should be part of a broader overhaul of the tax code.

(Reporting by Kim Dixon; editing by John Wallace) ((kim.dixon@reuters.com; +1 202 354-5864; Reuters Messaging: kim.dixon.reuters.com@reuters.net))

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