Money Minute: Obama Targets Corporate Tax Dodgers

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The party may soon be over for companies trying to dodge U.S. taxes through so-called "inversions."

Inversions, where a U.S. company buys a firm in a foreign country and relocates there to avoid paying U.S. corporate taxes, which are among the highest in the world, are becoming the target of the Obama administration. It's a move that has become very popular lately particularly among pharmaceutical companies. But the president wants it to stop.

corporate taxes treasury jack lew
Saul Loeb, AFP/Getty ImagesTreasury Secretary Jacob "Jack" Lew
Treasury Secretary Jack Lew spoke at a conference Wednesday encouraging Congress to enact laws that would ban the practice immediately and retroactive to May. That could jeopardize deals in the works for Medtronic (MDT) and Mylan (MYL).

As part of Lew's discussion on business reform he also said the tax rate for corporations could be lowered to the 20 percent range, which is a big improvement from the current top rate of 35 percent.

BMW is recalling roughly 1.6 million more of its 3-Series cars from model years 2000 to 2006. The issue has to do with air bags in the front passenger seat that when deployed could cause fragments of metal to hit passengers' faces. The air bag inflator is made by Takata, which has been responsible for millions of recalls over the past few years. This week's BMW recall is a much larger one but not the first related to the air bags. Last year it recalled 42,000 3-Series models for the same problem.

In trading Wednesday on Wall Street, the bulls beat the bears with the Dow Jones industrial average (^DJI) gaining 77 points, the Nasdaq composite (^IXIC) up 9 points and the Standard & Poor's 500 index (^GPSC) picking up 3 points.

When flying nowadays, you are constantly nickeled and dimed for things you once didn't have to pay a penny for and the airlines have come to rely on that revenue. Airlines around the world took off with $31.5 billion in fees last year. Adjusted for inflation that is more than 11 times the fee revenue just six years ago. Most of the fees -- 60 percent of them -- come from credit card companies paying airlines for frequent flyer miles it then offers to its customers. Of the money coming out of our pockets, the biggest revenue came from baggage fees followed by fees for things like drinks on board and advanced boarding. Three U.S. airlines topped the list for bringing in the most non-fare revenue: Delta (DAL), United (UAL) and American (AAL).

And finally, home-sharing website Airbnb, which has faced legal challenges in many cities around the world, including New York City and San Francisco, has just rebranded itself to give itself a new identity. While it features an entirely new looking website with video, it is its logo that is creating the most buzz among social media sites. Let's just say it's a little suggestive. The company says it is meant to look like an upside-down heart but does anyone really buy that? One thing's for sure. The campaign has worked so far. For a rebranding, it's getting lots of play.

-Produced by Karina Huber.


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144 Comments

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John

There goes black america!

July 17 2014 at 7:27 PM Report abuse rate up rate down Reply
rivera8787

He only has to look as far as Hollywood with all the actors and rappers......THEY'RE the ones not paying taxes. Oh wait if he did that he couldn't hang out with Z-J and Heyonce......

July 17 2014 at 4:35 PM Report abuse rate up rate down Reply
bnapoli

Obama could screw up a funeral.

July 17 2014 at 4:19 PM Report abuse -1 rate up rate down Reply
mac2jr

Stop having BABIES... You want to cut taxes, then stop screwing... Each baby adds to the cost of running the nation..

July 17 2014 at 4:06 PM Report abuse rate up rate down Reply
2 replies to mac2jr's comment
teabuster2

Not to mention welfare

July 17 2014 at 4:09 PM Report abuse -1 rate up rate down Reply
2 replies to teabuster2's comment
dopey.obamite

You'd know all about that, right SHORTBUSter.

July 17 2014 at 4:20 PM Report abuse rate up rate down
teabuster2

dopey.obamite

You'd know all about that, right SHORTBUSter.
==========================================
Hi Dopester

July 17 2014 at 4:22 PM Report abuse -1 rate up rate down
true.liberal1

So long as the newborns don't end up being incompetents like you, each new citizen adds to the productive capacity of an economy.

There's a lot of research supporting the strong correlation between population growth and economic growth.

Now if we could only find a way to cull the herd of you imbeciles, we'd be sittin ****.

July 17 2014 at 6:58 PM Report abuse +1 rate up rate down Reply
map1246

Companies will continue to flee the Obama regime. There is nothing Obama or his minions can do to stop the exodus except resign.

July 17 2014 at 3:54 PM Report abuse +2 rate up rate down Reply
2 replies to map1246's comment
mac2jr

100,000 U.S.A. companies left under the Bush Administration...

July 17 2014 at 4:06 PM Report abuse -1 rate up rate down Reply
1 reply to mac2jr's comment
rivera8787

mac2....put the crack pipe down dude......

July 17 2014 at 4:37 PM Report abuse +1 rate up rate down
teabuster2

You really live in a dream world

July 17 2014 at 4:07 PM Report abuse -1 rate up rate down Reply
mac2jr

Ok, let's all agree to do away with government, do away with all taxes, and allow Walmart, Home Depot, Exxon, BP, Comcast, ATT, and Wall Street supply us with Military Protection, Border Protection, Fire Protection, Police Protection, Water Way Protection, Air Ways Protection, Communications Protection, Disease Protection, Pollution Protection, Price Gouging Protection, Building Code Protection, etc... and while at it, let these Corporations provide us with Parks, National Forest, Interstate and in-state highways, bridges, sea ports, air fields, municipal utilities, etc.

Let's just try it for say, 10-years and see what our little universe looks like.

Wake up America, WAKE UP, ... please...

July 17 2014 at 3:53 PM Report abuse +2 rate up rate down Reply
4 replies to mac2jr's comment
teabuster2

true.liberal1

Which word(s) can't you understand (again)?
=========================================
I was just being polite for a change.

July 17 2014 at 3:46 PM Report abuse rate up rate down Reply
1 reply to teabuster2's comment
true.liberal1

Maybe it would have been easier to ask if there were any word(s) you could understand.

July 17 2014 at 6:59 PM Report abuse rate up rate down Reply
teabuster2

d.barack

Dunces like Darren Barthold want higher taxes on all Americans, so he can live comfortably in his mom's section 8 basement.
==========================================
Suppose you tell us what an intellectually challenged individual, like you, does for sustenance

July 17 2014 at 3:12 PM Report abuse +2 rate up rate down Reply
whstokey

If the Federal tax rate ever goes to 20% it will be 20% with not deductions so what they are saying is they want a 20% effective rate. Since that would mean the consumer would be paying for it in the goods a services why don't all the supporters of this approach say how much more they are willing to pay for Made In America than a foreign competitors products. Be careful; if you get what you are asking for the only folks that will win are those involved with the Federal Government. Once they kill off the private sector job creators you can count on being next. The only thing that does work is being competitive first, last and always so that you can sustain paying good wages & fringe benefites while growing opportunities in the private sector. Government consumes wealth faster than the private sector can create wealth so increasing taxes to increase spending in the public sector is, was and always will be a loser.

July 17 2014 at 3:07 PM Report abuse -1 rate up rate down Reply
1 reply to whstokey's comment
mac2jr

What you are failing to understand is that the Federal, State, and local governments are close to the Number ONE (1) consumer of Commercial goods.

You also overlook the FACTS, the fact is that nearly everything being produced by the Corporate is or was a product of Government Research and Development or Government Financing of Corporate Research and Development.

Wake up America, WAKE UP.... please...

July 17 2014 at 3:44 PM Report abuse +1 rate up rate down Reply
ddstan1120

When I first read the headline, I was sure that Obama was going after members, both past and present, of Congress and the Senate. Perhaps they can look into Hillary and Bill's tax returns, now they are no longer "flat broke, and in debt". LOL

July 17 2014 at 2:48 PM Report abuse +2 rate up rate down Reply