The collection of taxes is a problem all over the world including the United States where U.S. President Barack Obama outlined plans to close a legal loophole that lets companies such as Apple and Microsoft avoid tax on overseas profits. The President wants to raise $238bn (£157bn) by imposing a 14 percent tax on the up to $2bn US companies who have slashed overseas to fund the repair of the country’s volatile infrastructure with a further 19 percent tax on future foreign earnings, giving them a credit on foreign taxes and ensuring that they be reinvested in the US with no penalty. This will pave the way for much needed investment in the US, directed towards making existing products or delivering existing services more efficiently – often with fewer workers- instead of innovating new products or services that create new lucrative jobs. Under present rules, U.S. companies pay hardly any tax on their earnings abroad until they are brought back into the US.
Critics argue that these proposals will put dampers on the competitiveness of big companies.
For the last fifty years “big government,” “big business,” or “big labour” may have been the greatest threat to the United States in the future. We worry much more about Washington screwing up America than we do Apple, Exxon Mobil, or Walmart taking us down.
However, The National Association of Manufacturers have attacked these “ Piecemeal changes to US tax codes”.