Taxing the profits of US companies abroad

(Baonghean) - On Monday, February 2, President Barack Obama admitted that there was an increase in spending. According to the budget that the US government released 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

On Monday morning, the budget documents will be presented to the US Congress. And obviously, this budget will certainly face opposition in both houses, where Republicans have a majority. Previously, President Obama said that the US can afford to make the investments. Mr. Obama also emphasized that this will help the US reduce the budget deficit, return to growth and create new jobs "at the fastest pace since the 1990s."

President Obama 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 profits earned overseas. U.S. companies traditionally do not pay taxes on profits earned overseas until they return home.

President Obama also proposed ending the automatic budget cuts that have been in effect since 2013. At the same time, spending would increase to $74 billion, half of which would be for military spending. In response to doubts 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)