Tax hike on overseas earnings hit - bizjournals:

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Obama said he wants to remove incentives for shiftinfg jobs overseas by reforming rules thatalloa U.S. companies to defer payinvg taxes on profits earned abroad untip that money is brought to theUnited States. Under his proposal, thesew companies could not deducty expenses, such as interest on loans, that supporg their overseas investments until they pay taxex on their foreign profitsin America. An exception woulx be for research-and-development expenses.
The presiden t also proposed making the research and development taxcredigt permanent, a longtime prioritu for the business “We will stop lettinyg American companies that create jobs overseas take deductionss on their expenses when they do not pay any American taxes on their Obama said. “And we will use the savingsd to give tax cuts to companies that are investinhg in research and development here at home so that wecan jump-startf job creation, foster innovation and enhance America’s competitiveness.
” Obamza also proposed closing foreign tax credit loopholesx and cracking down on overseaws tax havens for corporations and Businesses were most concernee about Obama’s proposed changes to tax-deferral Most countries tax business profits only whered they are earned. U.S.-based multinationals, are taxed in other countries and in theUnitedr States. The ability to defeer U.S. taxes helps level the playing field, accordinf to business groups. “When you limit you limit the abilittyof U.S. companies to you impede growth inthe U.S.
and you cause the loss of jobs both at the companies directlyg impacted and companies in theifrsupply chains,” said Marty chief economist for the . “At a time when our economy is strugglin g and thousands of jobs are being lostever month, imposing an additional tax on U.S.-based international companiesw would put them at a massive disadvantage and cost Americann jobs,” said John Engler, president and CEO of the . About 21 million Americans work for companies withoverseax operations, according to NAM.
Dean Garfield, president and CEO of the Informatio TechnologyIndustry Council, applauded Obama’s proposal to make the R&D tax credirt permanent, but said his other proposals would raise the cost of doing business for U.S. companiee with overseas operations. For more information, see www.whitehouse.gov.