(CNSNews.com) - In his Saturday radio address, President Obama criticized American companies that "are fleeing the country to get out of paying taxes." Obama made it clear he wants that money to stay here, so the federal government can spend it:
"The vast majority of American businesses pay their taxes right here in the United States," Obama said. "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."
A growing number of U.S. companies are buying foreign firms so they can say that they are based overseas, thus avoiding U.S. corporate taxes, which are the highest in the developed world.
Although these so-called "inversions" are legal, Obama said they are "totally wrong" and "unpatriotic."
Obama is calling for tax reform that lowers the corporate tax rate and closes "wasteful" loopholes. "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," he said.
"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."
His administration is clearly worried about the corporate inversions.
In an op-ed in the Washington Post on Sunday, Treasury Secretary Jacob Lew wrote: "By moving their tax homes overseas, these companies are making the decision to reduce their taxes, forcing a greater share of the responsibility of maintaining core public functions on small businesses and hardworking Americans.
"That includes paying for the things all of us, particularly U.S. businesses, depend on: our national defense, education, medical research, courts and vital infrastructure such as roads, bridges and airports. In addition, by allowing these transactions to continue, we run the risk of eroding our corporate tax base and undoing the progress we have made to reduce our budget deficits."
The Obama administration is urging Congress to pass comprehensive business tax reform in addition to changing the inversion rules.