Jeff Paravano, firmwide Chair of Baker Hostetler's Tax Group, was quoted in a May 11, 2009, Dow Jones Newswires article, "White House Outlines Tax Changes On Offshore Income," which was also published on CNNMoney.com.
According to the article, the White House recently unveiled a $210 billion plan to tax more of U.S. firms' overseas earnings and crack down on tax avoidance—including a new measure to shut down a tax maneuver by foreign hedge funds. In addition to the hedge fund measure, additional proposals would tax more of firms' foreign profits. U.S. companies say the proposals would hamper their ability to compete in the global marketplace.
Paravano said that when taken together, the Obama tax proposals would be expected to raise the effective tax rate of a U.S. multinational by about 6 percent. That would mean an effective tax rate of 32 percent for one company his firm advises, Paravano said.
Paravano said he is troubled by the fact that Obama is not proposing to reduce the statutory corporate tax rate as part of his bid to root loopholes out of the code. "It's great to close tax loopholes if you're going to reduce the rate generally," he said. "If not, U.S. companies' effective tax rates will go so high that we can no longer compete."