Obama Going After Tax System Abusers

May 4, 2009 12:00:00 AM PDT
President Obama wants to change rules on corporations and citizens he claims funnel jobs and hundreds of billions of dollars overseas. The plan has two parts. First, companies will no longer be allowed to keep profits made in other countries tax-free. The administration said that will help close a loophole that encourages companies to shift jobs out of the U.S.

The second part of the plan goes after loopholes that corporations and individuals use, sometimes illegally, to hide billions in offshore banks in places like the Cayman Islands.

"The plan will add 800 agents to bring people to justice who hide their assets," said Treasury Secretary Tim Geithner.

The administration hopes the plan will bring in $210-billion dollars in new tax revenue over ten years. Corporations with billions to lose will fight the plan which also needs a green light from Congress.

The move is the latest attempted government fix of a broken financial system that billionaire investor Warren Buffet says has fundamentally shaken the confidence of the American public.

"They change their buying habits, their saving habits all kinds of things and we don't know when that will be over; we do know it will be over," said investor Warren Buffett.

Monday on Wall Street, the DOW was up over 160 points in early trading on news that construction spending and pending home sales were up last month.

Some investors are worried the DOW's two-month rally could hit a roadblock when results of "stress tests" grading the financial health of banks are released by the government on Thursday.

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