Obama Asks Congress for Crackdown on International Tax Evasion

Obama: Foreigners Should Not Hide Behind Shell Companies
  • President says lawmakers should invest in infrastructure work
  • Economy added 160,000 jobs in April, lowest in seven months

President Barack Obama said Congress should pass legislation to rebuild U.S. infrastructure, raise the minimum wage and crack down on money laundering and tax evasion, after his administration released a plan to make it harder for people to hide money in the U.S.

“In recent months we’ve seen just how big a problem corruption and tax evasion have become around the globe," Obama said Friday at the White House. Even legal methods of avoiding taxes are "still unfair and bad for the economy," he said.

On Thursday, the administration announced plans to capitalize on global concern about financial secrecy in offshore shell companies prompted by a massive document leak, the so-called Panama Papers, by proposing changes in U.S. laws and regulations to increase transparency and decrease abuses of the banking system.

The Labor Department on Friday said that U.S. employers added the fewest jobs in seven months in April amid subdued economic growth. Obama considers the economic recovery since he became president in 2009 to be the central achievement of his presidency and often highlights job growth. Employers added 160,000 jobs in April, lower than the 200,000 median forecast in a Bloomberg survey of economists but a record 74th consecutive month of gains.

“If the Republican Congress joined us to take some steps that are common sense, we could put some additional wind behind the backs of hardworking Americans,” Obama said.

The president and his surrogates have downplayed signs of a slowdown in the U.S. economy, instead blaming Congress for blocking proposals the administration says would spur more economic growth. Those include spending more money on infrastructure improvements, which Obama said would create jobs as well as “huge multiplier effects across the economy,” and a minimum wage increase.

Republican congressional leaders have evinced no interest in either proposal.

The administration’s effort to boost financial transparency in the U.S. includes proposed legislation to require companies to disclose the names of owners of any new entities they create. Obama said regulatory changes announced Thursday would “make sure foreigners cannot hide inside anonymous shell companies formed within the United States.”

He also called on the Senate to stop blocking international tax treaties, naming Senator Rand Paul of Kentucky in particular. The Republican has “been a little bit quirky on this issue,” Obama said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE