Typically, I don’t comment on proposed legislation or politics, but there has been more than a few articles over the last year on tax avoidance strategies corporations have been using to their advantage.
One of these loop holes, commonly referred to as a “double Irish with a Dutch sandwich”, allows corporations to shift profits to low or no tax jurisdictions. Obama is proposing a a one-time 14% tax to companies looking to re-patriot profits that would have been subject to the 35% corporate rate had they been taxed in the US. This means companies flush with cash, such as Apple, can move this capital back to the US for operations for a significantly lower tax hit. Also proposed in this legislation is a 19% tax on future foreign earning.
While this is a huge step to close the gap on tax loopholes, I feel strongly that a republican controlled congress, will meet these proposals with opposition.