US President Barack Obama's proposal to act to stop three offshore tax-saving strategies commonly used by US-based multinational companies has met a downbeat response from his own party, suggesting that his plan may face hurdles on its path through Congress, according to media reports.
For example, Representative Joseph Crowley, a Democrat on the House Ways and Means Committee, is reported as saying that he’s wary because the tax changes would hurt Citigroup, his New York district’s largest private sector employer.
Natalie Ravitz, a spokeswoman for Senator Barbara Boxer, a California Democrat, said that any tax overhaul should not lead to "unintended consequences", according to Bloomberg.
The move by Mr Obama comes at a time when US lawmakers and the administration have been piling pressur on individuals and firms they believe are evading taxes by making use of offshore financial arrangements. Already, the US has been locked in a long legal dispute with UBS, the Swiss bank, which has settled criminal charges that it helped wealthy US citizens evade taxes.
At issue is whether US companies can remain globally competitive if they have to pay tax on overseas profits.