THE TELEGRAPH: American companies may soon have to adapt to a fiscal regime without frontiers.
THE world is becoming a chillier place for multinationals, and for the owners of capital.
While President Barack Obama's plan to clamp down on the overseas earnings of US corporations has been billed as an attack on offshore havens, it heralds a deeper change in the way the US companies are taxed worldwide.
American citizens must pay US income tax on every dollar, peso, or yuan they earn, whether or not they set foot on US soil that year. Mr Obama is making the first efforts to extend this principle to companies as well.
At the moment, US multinationals can take tax deductions on overseas earnings, but delay tax on profits forever by reinvesting abroad. They can shuffle money from one subsidiary to another through the "check box" loophole. This is why US companies pay just $16bn (£11bn) a year on $700bn of foreign earnings, a tax rate of 2.3pc.
Mr Obama has a fight on his hands trying to stop it. >>> By Ambrose Evans-Pritchard | Tuesday, May 5, 2009
