President Obama slammed corporate inversions today as "insidious" and argued that Americans end up paying "the tab" when U.S. companies exploit tax loopholes.
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The Treasury Department announced on Monday that it was taking additional steps to discourage companies from using a tax loophole known as corporate inversion – that is when a U.S. company buys a foreign competitor and then moves overseas to reduce its tax bill.
Obama said he hopes the Treasury's steps will end the practice, and also called on lawmakers to help eliminate loopholes that he said benefit the wealthy and corporations.
"It sticks the rest of us with the tab and it makes hard-working Americans feel like the deck is stacked against them," Obama said.
In 2009, when the U.S. economy was crumbling, Obama first offered a plan to crack down on corporate tax loopholes. Business groups rallied against his proposal, arguing it would hurt the weak economy. Democrats in Congress also turned against Obama, and the loophole survived.
When the Treasury Department attempted to simplify a section of the U.S. tax code in 1996, it mistakenly ended up creating a tax loophole for corporate America. The White House has previously estimated the loophole has cost the country about $10 billion per year, with major companies benefiting.
"Only Congress can make sure that all the other loopholes that are being taken advantage of are closed," Obama said, urging lawmakers to act.