Obama tax plans could spark US corporate exodus

US President Barack Obama’s proposal to tax the offshore profits of US corporations could encourage all but the largest companies to follow their cash hoard overseas, according to business leaders and tax lawyers.

The plan would levy a one-time tax of 14% on the $2.1tn (€1.85tn) US companies have stockpiled abroad, sidestepping the Internal Revenue Service.

It also calls for a 19% minimum tax on future foreign earnings. The prospect of those increased taxes could spur some companies to relinquish their US residency altogether — either by merging with a foreign partner in a corporate inversion or finding a foreign buyer, according to Richard Harvey, a former senior official for the Treasury Department and the IRS.