President Obama on Tuesday spoke about the new rules by the Treasury that will make it harder for US companies to avoid paying their fair share of taxes.
The new rules will give middle class Americans a more fair shake, the President claimed.
The new law takes aim at inversion — a practice by which a US multinational merges with a foreign company and changes its legal tax residence to another, lower-tax country.
Those companies continues to do business in the United States but operate from another country for its base of operations.
“It’s not that they’re breaking the laws. It’s that the law is so poorly designed,” Obama said.
Obama says featuring such legal loopholes in the tax code can “come at the expense of middle class families because that lost revenue has to be made up somewhere.”
“It means that we’re not investing as much as we should in schools, in making college more affordable, in putting people back to work, in rebuilding our roads, our bridges, our infrastructure, creating more opportunities for our children,” the President continued.
The new Treasury regulations serve to interpret the spirit and letter of the current law governing foreign mergers.
The POTUS believes we need to take that law one big step further. “We shouldn’t make it legal to engage in transactions just to avoid taxes,” Obama said.