Weekly Address: Closing Corporate Tax Loopholes

WASHINGTON, DC — In this week’s address, the President continued his call for our nation to rally around an economic patriotism that says rather than protecting wasteful tax loopholes for a few at the top, we should be investing in things like education and job training that grow the economy for everybody.  The President highlighted the need to close one of the most unfair tax loopholes that allows companies to avoid paying taxes here at home by shifting their residence for tax purposes out of the country. The President has put forth a budget that does just that, and he has called for business tax reform that makes investment in the United States attractive, and creates incentives for companies to invest and create jobs here at home. And while he will continue to make the case for tax reform, the President is calling on Congress to take action and close this loophole now.

The audio of the address and video of the address will be available online at www.whitehouse.gov at 6:00 a.m. ET, July 26, 2014.

Remarks of President Barack Obama
Weekly Address
The White House
July 26, 2014

Hi, everybody.  Our businesses have now added nearly 10 million new jobs over the past 52 months.  The unemployment rate is at its lowest point since September 2008 – the fastest one-year drop in nearly 30 years.  401(k)s are growing, fewer homes are underwater, and for the first time in more than a decade, business leaders around the world have declared that the world’s number one place to invest isn’t China; it’s the United States of America – and our lead is growing.

None of this is an accident.  It’s thanks to the resilience and resolve of the American people that our country has recovered faster and come farther than almost any other advanced nation on Earth.

But there’s another trend that threatens to undermine the progress you’ve helped make.  Even as corporate profits are as high as ever, a small but growing group of big corporations are fleeing the country to get out of paying taxes.  They’re keeping most of their business inside the United States, but they’re basically renouncing their citizenship and declaring that they’re based somewhere else, just to avoid paying their fair share.

I want to be clear: this is only a few big corporations so far.  The vast majority of American businesses pay their taxes right here in the United States.  But when some companies cherrypick their taxes, it damages the country’s finances.  It adds to the deficit.  It makes it harder to invest in the things that will keep America strong, and it sticks you with the tab for what they stash offshore.  Right now, a loophole in our tax laws makes this totally legal – and I think that’s totally wrong.  You don’t get to pick which rules you play by, or which tax rate you pay, and neither should these companies. 

The best way to level the playing field is through tax reform that lowers the corporate tax rate, closes wasteful loopholes, and simplifies the tax code for everybody.  But stopping companies from renouncing their citizenship just to get out of paying their fair share of taxes is something that cannot wait.  That’s why, in my budget earlier this year, I proposed closing this unpatriotic tax loophole for good.  Democrats in Congress have advanced proposals that would do the same thing.  A couple Republicans have indicated they want to address this too, and I hope more join us. 

Rather than double-down on the top-down economics that let a fortunate few play by their own rules, let’s embrace an economic patriotism that says we rise or fall together, as one nation, and as one people.  Let’s reward the hard work of ordinary Americans who play by the rules.  Together, we can build up our middle class, hand down something better to our kids, and restore the American Dream for all who work for it and study for it and strive for it.

Thanks, and have a great weekend.

Remarks by President Obama After Meeting with Central American Presidents

REMARKS BY PRESIDENT OBAMA AFTER MEETING WITH PRESIDENT PÉREZ MOLINA OF GUATEMALA, PRESIDENT JUAN ORLANDO HERNÁNDEZ OF HONDURAS, AND PRESIDENT SALVADOR SÁNCHEZ CERÉN OF EL SALVADOR ON IMMIGRATION

Cabinet Room

3:42 P.M. EDT

PRESIDENT OBAMA:  Well, I want to thank very much, President Molina, President Hernández and President Sánchez Cerén for being here today.  Our nations share extraordinary ties of culture, of family, of promise that enrich all of us and make our countries stronger.  And we have a wide range of issues that we share and have discussed in the past in various bilateral and multilateral forms. 

But today, our focus was on what’s been a significant challenge in the news and, more importantly, a significant challenge for families that have been at risk as a consequence of the rise of unaccompanied children traveling from Central American countries to the U.S. border, leaving their homes in Central America and making a journey that poses great danger to themselves.

All of us recognize that we have a shared responsibility to address this problem.  President Molina hosted Vice President Biden in an earlier meeting to look at specific steps that could be taken to alleviate this challenge.  And today, what I did was share with my counterparts here the efforts that the United States has in our continuing response, including unprecedented numbers of Border Patrol agents and resources at the border, more facilities to properly care for these children that have already arrived, and more resources for our immigration courts to process the claims of these children in a way that’s orderly and timely that protects their due process but also expedites the length of time that it takes to assure that they’ve gotten a fair deal.

Now, I emphasized to all three Presidents that the American people, and my administration, have great compassion for these children and want to make sure that they are cared for the way all children should be cared for.  And we’ve seen an outpouring of generosity from not only families at the borders themselves that are providing assistance -- you have nonprofit organizations and churches that are providing assistance -- but actually from across the country people have expressed their concern and compassion for these children.

But I also emphasized to my friends here that we have to deter a continuing influx of children putting themselves at great risk and families who are putting their children at great risk.  And so I emphasized that within a legal framework and a humanitarian framework and proper due process, children who do not have proper claims and families with children who do not have proper claims, at some point will be subject to repatriation to their home countries.  

I say that not because we lack compassion, but because in addition to being a nation of immigrants we’re also a nation of laws.  And if you have a disorderly and dangerous process of migration, that not only puts the children themselves at risk, but it also calls to question the legal immigration process of those who are properly applying and trying to enter into our country.

Each President here emphasized the degree to which they have already begun to make efforts to discourage this dangerous trafficking in children.  And I want to thank all of them publicly -- I already did so privately -- for specific efforts that they’re taking in each country to discourage parents from sending their children on this journey, for going after and arresting smugglers in more aggressive fashion, and for working with us on the issue of repatriating the children and families in a safe and humane way. 

Initial reports show that our joint efforts appear to be paying off, and the number of unaccompanied children crossing the border this month appears to have dropped by half since June.  Of course, it’s still too high.  And so today we are here to continue to work together.

Finally, even as we meet this immediate situation, we all recognize that we have to do more to address the root causes of the problem, and that includes poverty and violence in Central America.  I discussed this when I met with Central American leaders last year in Costa Rica.  And we are committed to working together in partnership with each of these countries to find ways in which we can come up with more aggressive action plans to improve security and development and governance in these countries. 

I expressed again that we have a shared responsibility, for example, when it comes to dealing with drug trafficking, that we are dealing with the demand for drugs in the United States and doing more to stop the cross-border flows of arms, for example, from the north to the south.  And I also continue to emphasize the fact that not just if, but when we pass comprehensive immigration reform in this country, then we will have the capacity not only to strengthen resources at our borders, but we’re also going to have the capacity to create more orderly ways for legal migration, in some cases temporary worker programs that allow people to advance economically; allow our economy to grow, allow families to be reunified; but also, in many cases, a lot of people to return to their families in their home countries.              

With respect to the U.S. meeting some of its responsibilities, I briefed my fellow Presidents on the supplemental request that is working its way through Congress.  And I just want to mention that it is my hope that Speaker Boehner and House Republicans will not leave town for the month of August for their vacations without doing something to help solve this problem.

We have a supplemental that provides resources for additional border security, for additional immigration judges, for additional resources to assist our Central American countries in providing facilities, and opportunities, and security needs to deal with the smugglers.  And we need to get that done.  And so there have been a lot of press conferences about this -- we need action and less talk. 

So let me once again thank President Molina, President Hernández, President Sánchez Cerén.  Each of these leaders have shown great responsiveness and great sincerity in wanting to deal with this situation in a sensible and compassionate way.  I appreciate their efforts.  They all face significant challenges, and the one thing that we I think all recognize is, is that if we are working together in a coordinated fashion, if the United States is listening to the ideas of these Presidents in how they are creating greater opportunities in their country, and also how we can deal with the challenges of the smugglers, I’m confident that we’re going to be able to solve this problem.

So they’ve proven to be excellent partners, and this is a situation where the whole can be greater than the sum of its parts if we’re working together effectively.

So thank you so much, gentlemen, for not only your thoughtful presentations, but also your countries’ cooperation.  It means a lot to me and to the American people.

Q    Mr. President, what about the refugee proposal?

Q    Is the refugee program possible?

PRESIDENT OBAMA:  Actually, I wasn’t going to take questions, but let me just respond to this particular question because I felt like some of the stories were a little over cranked.  And as I explained to my fellow Presidents, under U.S. law, we admit a certain number of refugees from all around the world based on some fairly narrow criteria.  And typically, refugee status is not granted just based on economic need or because a family lives in a bad neighborhood or poverty.  It’s typically defined fairly narrowly -- the state, for example, that was targeting political activists and they need to get out of the country for fear of prosecution or even death.

There may be some narrow circumstances in which there is a humanitarian or a refugee status that a family might be eligible for.  If that were the case, it would be better for them to be able to apply in-country rather than take a very dangerous journey all the way up to Texas to make those same claims.  But I think it’s important to recognize that that would not necessarily accommodate a large number of additional migrants. 

What’s more important is going to be for us to be able to find the kinds of solutions, both short-term and long-term, that prevents smugglers from making money on families that feel desperate; that ensure that we’re creating greater security for families in Central America, and that we are helping to grow opportunity long-term in Central America and in the kind of legal immigration system that makes this underground migration system less necessary.  And that’s what I’m going to be committed to doing. 

Q    Will you accept less money from the supplemental, Mr. President?

PRESIDENT OBAMA:  I said one question, Jeff.  Well, we are going to continue to work in consultation with Central American countries to find additional creative and sensible ways in which legal claims for migration can be processed in those countries in a fair and just way. 

All right, you guys got some bonus coverage there.  (Laughter.)

END
4:00 P.M. EDT