THE WHITE HOUSE
Office of the Press Secretary
------------------------------------------------------

May 4, 2009 

Leveling the Playing Field: Curbing Tax Havens and Removing Tax Incentives For Shifting Jobs Overseas

There is no higher economic priority for President Obama than creating new, well-paying jobs in the United States. Yet today, our tax code actually provides a competitive advantage to companies that invest and create jobs overseas compared to those that invest and create those same jobs in the U.S. In addition, our tax system is rife with opportunities to evade and avoid taxes through offshore tax havens:

• In 2004, the most recent year for which data is available, U.S. multinational corporations paid about $16 billion of U.S. tax on approximately $700 billion of foreign active earnings – an effective U.S. tax rate of about 2.3%.
• A January 2009 GAO report found that of the 100 largest U.S. corporations, 83 have subsidiaries in tax havens.
• In the Cayman Islands, one address alone houses 18,857 corporations, very few of which have a physical presence in the islands.

Leveling the Playing Field: Curbing Tax Havens and Removing Tax Incentives For Shifting Jobs Overseas

1. Replacing Tax Advantages for Creating Jobs Overseas With Incentives to Create Them at Home

• Reforming Deferral Rules to Curb A Tax Advantage for Investing and Reinvesting Overseas 
• Closing Foreign Tax Credit Loopholes 
• Using Savings To Make Permanent The Tax Credit for Investing in Research and     Experimentation at Home