Washington: Accusing US companies outsourcing business to India of following unfair business practices, President Barack Obama says his proposal to tax firms shipping jobs overseas was only intended to provide a level playing field.
"If you are a business here, entirely located in the United States, and investing in the United States, and hiring workers in the United States, you are paying a 35 percent rate," he said in an Oval office interview with Bloomberg/Businessweek.
"If you are a multinational and you are investing in India, and your workforce is in India, and your plants and equipment are in India, but your headquarters are here, you are taking deductions on all the expenses in India, but you are keeping your profits outside the United States, that just doesn't seem entirely fair," Obama said.
"The same is true where you have companies that have 90 percent of their sales in the United States, but are posting 90 percent of their profits overseas."
"You get a sense there that the accountants have been busy," he said, suggesting that these companies were taking unfair advantage of current tax laws.
Obama said taking note of "some legitimate concerns" about a similar proposal last year, "we made modifications around some of these proposals."
Some US companies had then "pointed out, well, we may be investing a lot in R&D here in the United States, but we have got to have factories or sales forces outside the United States, and you don't want to discourage [companies] from doing that."
"But our goal here is simply to make sure that there is an even playing field between businesses who are investing in the United States, hiring US workers, selling to a lot of customers here as well as overseas, and those who are operating across borders," Obama said.
"And that is an area where there can be some legitimate debate, but certainly shouldn't be portrayed, somehow, as being anti-business."
First Published: Saturday, February 13, 2010, 09:38