Ever since he has taken office, President Barack Obama has been on the record as saying that corporations that operate overseas in order to avoid taxes are unpatriotic.
Well, according to a report published yesterday by Bloomberg’s Zachary Mider, President Obama is guilty of committing treason against his own manifesto by aiding one $20 billion American company sidestep taxes.
Mider writes, “As part of the bailout of the auto industry in 2009, Obama’s Treasury Department authorized spending $1.7 billion of government funds to get a bankrupt Michigan parts-maker back on its feet— as a British company.”
The company that President Obama aided is known as Delphi Automotive and is originally from a Detroit suburb. In recent years, however, the company has established its paper headquarters in England, helping the company to avoid a U.S. tax bill that could be as much as $110 million annually.
Ironically, it was just last month that Obama went on a rant about companies that planned to set up shop outside of the U.S., labeling them “corporate deserters.”
Similar tactics, which have been nicknamed “inversion tactics,” have recently been used by other high profile companies, including Jim Beam and Chiquita Banana. All of these companies are trying to escape the United States’ 35 percent corporate income tax rate, which is the highest in the developed world.
In regards to the Delphi scandal and the government’s assistance, Adam Hodge, a Treasury Department spokesman, said, “We weren’t involved in that decision regarding the tax implications in their emergence from bankruptcy. We were focused on trying to save the auto industry.”
Overall, until the beginning of this year, the Obama administration has paid little heed to the recent wave of inversion tactics, and has actually helped it to flourish as the country loses out on billions of dollars in taxes. But the latest round of budget proposals has attempted to close those loop holes, the administration says.
“My attitude is I don’t care if it’s legal — it’s wrong,” the president said. “You shouldn’t get to call yourself an American company only when you want a handout from American taxpayers.
As far as Delphi scandal goes, the Obama administration says that they are attempting to rescind the tax benefits that the government-assisted company has received. It’s unclear if they will be successful in this pursuit.
4Wheel Online Blog - Automotive News 