US President Barack Obama has proposed to establish a new minimum tax on foreign earnings to discourage large US firms from shipping jobs to countries like India.
The proposed move would make it a bit tough for US multinationals to ship jobs overseas and will give incentives to those who bring operations back into the US.
“Introducing the principle of a minimum tax on foreign earnings would help address these problems and discourage a global race to the bottom in tax rates,” it said.
Obama’s proposal is part of a larger tax plan that is central to his re-election strategy. He is also proposing that companies will no longer be allowed to claim tax deductions for moving their operations abroad. At the same time, he is proposing to give a 20 per cent income tax credit for expenses of moving operations back into the United States.
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