God knows that I have been an ouspoken critic of some of the Obama programs, not because I dislike them but rather I feel that more needs to be done, especially for the middle class.  But I have to give him his props where they are due.

President Barack Obama’s move to curb overseas tax havens and job out-sourcing was his first major proposal in what promises to be a broad overhaul of the U.S. tax system.

“It’s a downpayment on the larger tax reform we need to make our tax system simpler and fairer and more efficient for individuals and corporations,” Obama said making his tax-have an announcement on Monday.

These tax shelters are giving US companies a way to avoid almost ALL their tax debt.

Tax shelters are countries with corporate tax rates much lower than those of the U.S., which make them popular for U.S. businesses looking to lower their tax bills.

Whereas the U.S. corporate tax rate is 35 percent, Iceland’s is 15 percent and Switzerland’s is just 8.5 percent. Many countries in the Caribbean don’t tax corporations at all. Companies shift profits to subsidiaries in such low-tax countries to avoid paying the Internal Revenue Service.

One of the most popular tactics involves setting up multiple overseas subsidiaries to move profits from high-tax countries to low-tax countries. Under so-called “check the box” rules, companies can register their subsidiaries as separate units that aren’t subject to U.S. tax rules.

In one scenario, a U.S. company could use operations in the Virgin Islands to avoid paying taxes on investments in Sweden. The company does this by setting up three new corporations: a subsidiary in Sweden, a holding company in the Virgin Islands as well as another subsidiary owned by the holding company.

A January report by congressional investigators found that 83 of the 100 largest publicly traded companies in the U.S. operate subsidiaries in tax havens, like the British Virgin Islands and Bermuda, where there is no corporate tax.Use of subsidiaries varies greatly among big corporations. Banking giant Citigroup has more than 4,000 subsidiaries, according to the Government Accountability Office, a nonpartisan investigative arm of Congress.

I will be watching and ranting about how effect the President will be on this important piece of legislature.