Offshore Tax Changes

"The Obama administration released more details this week of its planned overhaul of the tax structure for American companies doing business overseas. In order to scrounge money for his expensive domestic programs from whatever source possible, Obama proposes a variety of ways to raise $210 billion. Income shifting by U.S. companies to foreign subsidiaries would be restricted. U.S. companies that draw at least 80 percent of their income from foreign business will no longer be able to treat interest and dividends as exempt from withholding tax. Also, some U.S. firms that pay levies in foreign jurisdictions would no longer be eligible for foreign tax credits. Taken together, these proposals will amount to a 6 percent increase in the corporate tax rate for U.S. companies, which already pay about 10 percent higher taxes than companies in the rest of the developed world. Ultimately, this will make American firms less competitive in the international marketplace at precisely the time they will need every advantage they can gain in order to help turn around our economy."

-From The Patriot Post-