Obama Rips ‘Insidious’ Tax Loophole

President Obama on Tuesday addressed the Panama Papers, tax-avoidance schemes, and the Treasury Department’s new effort to fight them. The main target of Obama’s remarks was corporate tax inversions, a way that businesses avoid paying U.S. taxes by merging with overseas partners.

“Tax avoidance is a big global problem,” Obama said, addressing the leak of documents that show how global business and government leaders have parked billions of dollars overseas in undisclosed accounts. “It’s not unique to other countries.”

Obama said Treasury’s new guidance on inversions cannot fully close the loophole, which corporations have been legally taking advantage of for years.

“I want to be clear: While the Treasury Department actions will make it more difficult and less lucrative for companies to exploit this particular corporate-inversions loophole, only Congress can close it for good,” he said. “When companies exploit loopholes like this, it sticks the rest of us with the tab and it makes hardworking Americans feel like the deck is stacked against them.”

Obama’s remarks came hours after revelations from Panama-based law firm Mossack Fonseca toppled the government of Iceland, whose prime minister resigned Tuesday over allegations that he and his wife owned a company with millions of dollars in holdings in some of the country’s collapsed banks.