United States President Barack Obama has commented on the Panama Papers scandal on Tuesday. He has called on tax reforms internationally after the massive tax documents leak.
In a report by USA Today, the president first praised the new Treasury Department rules on cracking down on corporate tax inversions. He called the practice of merging with a foreign company in an attempt to escape U.S. taxes as one of the most insidious tax loopholes.
He then talked about the Panama Papers saying it served as another reminder that tax avoidance is a big and a global problem, Business Insider reported. Obama added that most of the leaked documents are legal and that is the problem as they are not breaking the laws, pointing out that the regulations are poorly designed leading to companies and people being able to evade tax.
The president continued to condemn the much talked about matter saying that people and corporations who can afford the accountants and lawyers to arrange the tax deals are the ones "gaming the system." Although there are no big names in the U.S. mentioned in the Panama Papers, Obama still called on the Congress to overhaul the corporate tax system noting that the abuse of tax breaks are greatly affecting middle-class families.
He continued to say that companies exploiting these kinds of loopholes are making it harder to invest in things that will make the American economy be stronger for generations to come.
White House Press Secretary Josh Earnes also said in a statement on Monday that these kinds of loopholes erode the American tax base and undercut the businesses that play by the rules. He echoed Obama's statement saying these incidents "leave the middle class and small businesses to pay the tab."
The latest new regulations from the Treasury Department are the third round of the new rules issued by them. These rules seek to limit the internal corporate borrowing that lets the profits out of the U.S., FOX News reported.
Some of the people named in the massive tax leak are Lionel Messi, aides of Russian President Vladimir Putin and relatives of Chinese President Xi Jinping.
