U.S. President Barack Obama on Saturday called for closing corporate tax loopholes that allow U.S. companies to relocate their headquarters overseas to avoid paying corporate taxes at home.
"Even as corporate profits are as high as ever, a small but growing group of big corporations are fleeing the country to get out of paying taxes," Obama said in his weekly address.
"They're keeping most of their business inside the United States, but they're basically renouncing their citizenship and declaring that they're based somewhere else, just to avoid paying their fair share," he said.
While a loophole in the U.S. tax laws makes this totally legal, Obama said it's "totally wrong", adding that it "damages the country's finances" when these companies "cherrypick their taxes".
"The best way to level the playing field is through tax reform that lowers the corporate tax rate, closes wasteful loopholes, and simplifies the tax code for everybody," said the president.
"But stopping companies from renouncing their citizenship just to get out of paying their fair share of taxes is something that cannot wait," Obama said, urging Congress to pass a bill to close the "unpatriotic" tax loopholes.
Both Democrats and Republicans support eliminating corporate tax loopholes, but there is partisan disagreement about what such legislation should look like. Analysts said the chances of Congress passing legislation before midterm elections in November remain slim.