Silicon Valley pans Obama tax overhaul

Silicon Valley is panning President Obama’s plan to change the corporate tax code. Tech companies loathe Obama’s proposal to tax multinational corporations some undisclosed amount on their overseas earnings. Multinationals are currently not taxed on such earnings unless they “repatriate” the money to the United States, at which point they pay the 35 percent corporate income tax. Tech companies are plumping instead for a tax holiday on repatriated earnings, supported by Sen. Barbara Boxer (D-CA).

TechAmerica’s statement gives the gist of the tech sector’s gripe with Obama’s plan: “By its nature, the tech sector is global and this framework would penalize U.S. companies that also operate overseas. We are the only G-8 country to use a global tax system, which puts our companies at a disadvantage as everyone else moves towards a ‘territorial’ system. We strongly discourage any proposals that would raise taxes on U.S.-based firms that are globally competitive.”