Obama launches a tax raid

US president Barack Obama's plan to tax the foreign earnings of American companies has proved controversial.

The US administration presented its $4trn annual budget this week. One of the most controversial features was the president's plan to mount a raid on US corporations' foreign earnings. US firms currently pay little or no tax on their foreign earnings until they are brought back to America, where corporation tax is a comparatively high 35%.

The plan proposes a one-off, 14% tax on the $2trn American companies are keeping abroad, using the proceeds to fund $238bn in infrastructure spending. Future foreign earnings would then be taxed at 19%, regardless of whether they are brought back to the US or not. Moreover, US corporation tax should fall to 28% in the future, suggested the administration.

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Andrew Van Sickle
Editor, MoneyWeek

Andrew is the editor of MoneyWeek magazine. He grew up in Vienna and studied at the University of St Andrews, where he gained a first-class MA in geography & international relations.

After graduating he began to contribute to the foreign page of The Week and soon afterwards joined MoneyWeek at its inception in October 2000. He helped Merryn Somerset Webb establish it as Britain’s best-selling financial magazine, contributing to every section of the publication and specialising in macroeconomics and stockmarkets, before going part-time.

His freelance projects have included a 2009 relaunch of The Pharma Letter, where he covered corporate news and political developments in the German pharmaceuticals market for two years, and a multiyear stint as deputy editor of the Barclays account at Redwood, a marketing agency.

Andrew has been editing MoneyWeek since 2018, and continues to specialise in investment and news in German-speaking countries owing to his fluent command of the language.