Obama Set to Crack Down on Tax Havens

President Barack Obama is gearing up for a fight with Congress over closing some tax loopholes and getting rid of some tax deductions for businesses. The expected proposals are aimed at businesses and individuals that take advantage of low tax rates and tax havens. In some cases, these loopholes and havens mean lower revenues for the U.S. government. The idea is to reverse that and raise billions more in tax revenue. Stock Market Funding reports on the proposal suggested by President Obama:

The president's proposal would eliminate some tax deductions for companies that earn profits in countries with low tax rates, as well as consider U.S. citizens who use tax havens in the Bahamas or Cayman Islands guilty of violating U.S. tax laws. If Obama wins congressional approval for the changes -- and he faces a challenge on Capitol Hill -- it could deliver $210 billion in tax revenue over the next decade.

The Obama Administration insists that overseas tax benefits won't be completely changed, however. Besides, even though this overseas benefit would be revoked for some businesses, Obama does plan to propose that a research tax credit -- which is set to expire this year -- be made permanent. 

As expected, business leaders and individuals who make use of tax havens are decrying the proposal. Also, there are some who believe that the tax plan doesn't go far enough to curb tax evasion behaviors.

In the end, though, it will be up to Congress to make the decision. The Obama Administration acknowledges that it has a tough road ahead, since many in Congress may be reluctant to revoke tax deductions and crack down on those that use tax havens. After all, these big spenders are often big campaign contributors.