President Obama has proposed a new 14% tax on some kind of profits held or earned overseas by US companies.
(Reuters) - President Barack Obama's fiscal 2016 budget will seek new taxes on trillions of dollars in profits accumulated overseas by U.S. companies, and a new approach to taxing foreign profits in the future, but Republicans were skeptical of the plan on Sunday.
Reviving a long-running debate about corporate tax avoidance, Obama will target a loophole that lets companies pay no tax on earnings held abroad, the White House said. But his proposal was certain to encounter stiff resistance from Republicans.
In his budget plan to be unveiled on Monday, Obama will call for a one-time, 14 percent tax on an estimated $2.1 trillion in profits piled up abroad over the years by multinationals such as General Electric (GE.N), Microsoft (MSFT.O), Pfizer Inc (PFE.N) and Apple Inc (AAPL.O).
Several of my Tea Bagger friends -- as well as a rightwingnutjob family member -- are telling me this is a tax on goods manufactured abroad, by foreign workers, and sold abroad to foreign consumers -- as one of them said to me:
"None of the activity Hussein Obama proposes is carried on in the US, thus, he should not be taxing it! Yadda, yadda, yadda."
Could someone explain to the Old Redneck exactly what's going on here? Seriously -- I'm not clear on this and would like to be able to shut them down.