From the news: "President Barack Obama vowed on Monday to overhaul tax policies that he said reward companies for shifting U.S. jobs overseas and allow wealthy people to evade taxes using offshore accounts. The White House estimated the plan would save $210 billion over the next decade. In one proposal businesses are poised to fight, Obama would tighten tax-code provisions that allow firms to defer paying taxes on profits they make overseas as long as those earnings are plowed back into the foreign subsidiaries."
"The proposals must go through Congress. Several lawmakers, including U.S. House of Representatives Ways and Means Chairman Charles Rangel, signaled support for Obama's proposals. But one crucial player, Senator Max Baucus, Democratic chairman of the Senate Finance Committee, called for more study of how U.S. businesses would be affected. Currently, U.S. firms are allowed to defer paying taxes on profits earned overseas if they put those profits back into their foreign subsidiaries. Critics say those rules encourage businesses to bolster their foreign operations instead of creating jobs at home."
Question now is, would such revision of their tax laws be WTO compliant? And more importantly, how does that affect our economy and our BPO industry in particular? We should study this development very closely.
