As multinational corporations and lobbyists push for a reduction in the corporate tax rate and a tax holiday on repatriated foreign profits, the tax loopholes that have encouraged companies to shift their income abroad have managed to stay largely intact.
The Obama administration and the Internal Revenue Service have made it a priority to focus on tax avoidance schemes and have ratcheted up their enforcement efforts against foreign tax shelters and secret bank accounts at UBS, Credit Suisse and other banks. But other tax avoidance schemes have proven much more difficult to stop, including abuses of foreign tax credits and the so-called “check the box” rules. A pair of eye-opening articles co-published by the Financial Times and ProPublica have focused on how the British bank Barclays has profited from foreign tax credit deals with U.S. banks and corporations, and how corporations have successfully resisted efforts by the Obama administration and the Clinton administration to clamp down on “check the box” tax schemes.
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