Why, one may ask, is Barack Obama taking on yet another huge fight by taking aim at foreign tax havens? Yes, it's unfair that multinationals pay an average tax rate of only 2 percent on their foreign revenues, and it's unfair that some wealthy Americans are avoiding taxes altogether by parking their fortunes abroad. But, hey, these things have been true for decades. So why take them on now, when the president is also taking on universal health insurance and global warming, and trying to get the economy going again?
The White House says that some jobs go abroad because American companies are lured there by tax loopholes which, if closed, would bring the jobs home. True. But a crackdown on tax havens might also cost American jobs if companies decided that a higher tax burden here required them to cut payrolls in order to stay competitive or to simply leave the United States altogether.
Another possible explanation is that it was a campaign promise. Obama frequently criticized the tax code for allowing American companies with overseas operations to defer paying taxes on corporate profits if they placed the money back into their foreign subsidiaries. But this can't be it, either. He criticized several other things as well -- such as the North American Free Trade Agreement -- which he now seems comfortable with.
So again: why this, and why now?
The answer after the jump.