Taxation of foreign profits of US companies

(Baonghean) - On Monday, February 2, President Barack Obama acknowledged an increase in spending. According to the budget released by the US government on Monday, there was a significant increase in federal spending on education, research, infrastructure or military spending.

The US government's budget was released on Monday, February 2. Photo: AP/J.Scott Appelewhite

The budget will be presented to Congress on Monday morning, and it is certain to face opposition in both houses, where Republicans hold a majority. President Obama has said the United States can afford to make the investments. He also stressed that this will help the United States reduce the budget deficit, return to growth and create new jobs “at the fastest pace since the 1990s.”

President Obama has proposed a 6-year plan to invest in infrastructure (including roads, bridges, etc.) with an amount of up to 478 billion USD. And the budget for these investments will be partly taken from taxes levied on foreign profits of US companies. Accordingly, the authorities will levy a one-time tax of 14% each year and thanks to that, the Government will collect about 238 billion USD from the above companies.

The budget also proposes that U.S. companies could be taxed 19 percent on all foreign profits. U.S. companies traditionally do not pay taxes on profits earned overseas until they are brought back to the U.S.

President Obama also proposed ending the automatic budget cuts that have been in effect since 2013. At the same time, spending increased to $74 billion, half of which would be for military spending. In response to concerns about Congress rejecting the budget, in an interview with the Huffington Post, Mr. Obama warned: "If Congress rejects my proposal and returns to arbitrary cuts, this will endanger our economy and our military."

Chu Thanh

(According to LeMonde 2/2)