President Obama wants to impose a one-time mandatory 14 percent tax on foreign profits that U.S. companies have stashed abroad, a move that would force Minnesota’s major companies to pay the government billions of dollars, according to The Star-Tribune in Minneapolis, Minn.
The tax revenue would be used to fund bridges, roads and other projects in America’s aging infrastructure system and to provide revenue for America’s sagging Highway Trust Fund.
Under current law, companies face a top rate of 35 percent on foreign profits if they are returned to the U.S. Many opt to leave them abroad to avoid the tax. Collectively, American corporations have not paid U.S. taxes on $2 trillion in foreign profits.
The proposal for the one-time tax, announced Monday as part of Obama’s 2016 budget, faces a chilly reception in the Republican-controlled U.S. Senate and House. But polls show corporate tax avoidance remains a peeve of most Americans. Moreover, the White House has tried to buffer the blow of the newly proposed tax by embedding it in a larger program of business tax reforms.
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