Obama To Crack Down on Offshore Tax Havens

At around 11 a.m. eastern, Obama and Timothy Geithner will announce a plan to reform international tax policy, which will crack down on offshore tax havens and end incentives for companies that ship jobs overseas. I'll post video when it's up.

The two components of the president's plan include reforms that ensure the tax code does not handicap companies seeking to create jobs at home, as well as reforms that reduce the amount of tax revenue lost to tax havens.

The White House is targeting companies that use loopholes in the law that allow them to legally avoid paying billions in taxes. It also focuses on wealthy individuals who break the law by creating hidden overseas accounts.

The Obama administration plans to raise $103.1 billion by removing tax advantages for investing overseas and will use that money to help make a tax credit permanent, the officials said. The administration also hopes to raise $95.2 billion over the next 10 years by cracking down on overseas tax havens.

The White House, under the plan, would eliminate the "check-the-box" provision which allows corporations to designate overseas subsidiaries as branches of the company, not subjected to taxes. This tax loophole enables companies to avoid paying U.S. taxes. CNN

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Obama to Close Offshore Tax Havens

The Department of Justice is also going after wealthy tax cheats with secret Swiss UBS bank accounts who are illegally hiding their money.
Tax havens are legal loopholes that wealthy people take advantage of because they can. Sen. Carl Levin has been leading this charge to close tax loopholes.

HP: As part of the budget that he will introduce this Thursday, President Barack Obama will call for the closure of tax havens that allow companies to pay greatly reduced tax rates, an administration official tells the Huffington Post.

The inclusion of "funding for a robust portfolio of IRS international tax compliance initiatives" could help Congress make up an estimated $100 billion of revenue that is lost when companies set up what are often P.O. box addresses in locales like the Cayman Islands. Another Democratic official involved in the budget proceedings, however, cautioned that closing these loopholes could pose additional difficulties, specifically in determining which jurisdictions qualify as tax havens, and which companies qualify as domestic.

Who takes advantage of tax havens? 

A GAO report from December revealed that 83 of the 100 largest publicly traded U.S. corporations had placed subsidiaries in tax haven jurisdictions to, ostensibly, pay less on their tax bills.