POLITICS

Obama Calls Out American Companies For 'Gaming The System'

07/24/2014 05:58 pm ET | Updated Jul 25, 2014

In a CNBC interview on Wednesday, President Barack Obama took aim at corporate inversions -- deals where a U.S. company keeps its operations at home, but moves its formal address overseas to avoid paying taxes.

"Companies thrive in the United States in part because they benefit from the best university system in the world, the best infrastructure," Obama said. "There are a whole range of benefits that have helped to build companies, create value, create profits. For you to continue to benefit from that entire architecture that helps you thrive, but move your technical address simply to avoid paying taxes, is neither fair, nor is it something that's going to be good for the country over the long term."

Watch Obama's comments in the video above.

Corporate inversions are legal, and companies say they engage in them because the U.S. tax rate is higher than in other countries. But inversions open up a host of ways to permanently limit, or even eliminate, any American taxes paid by companies that operate in the United States.

"You're just gaming the system," Obama said Wednesday. "You are an American company."

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