Obama: new tax rule will fight corruption, help economy

WASHINGTON (Reuters) - U.S. President Barack Obama said on Friday a long-delayed rule requiring the financial industry to identify the real owners of companies will help fight corruption and tax evasion and boost the economy.

His administration on Friday issued the Customer Due Diligence rule in the works since 2012 and proposed legislation meant to stop prevent criminals from using shell companies to evade taxes, launder money, and finance terror.

“These actions are going to make a difference,” Obama told reporters. He said they would help the administration to do a better job of tracking financial flows and making sure companies are “paying the taxes they owe rather than using shell corporations and offshore accounts to avoid doing the things that ordinary Americans are doing every day.”

Obama also called on Congress to pass legislation that requires all companies formed in the United States to report information to the financial crimes enforcement network at the Treasury Department.

“That’s going to help law enforcement better investigate and prevent financial crimes,” Obama told reporters.

Obama also urged Congress to raise the federal minimum wage, pass new trade agreements, and simplify the tax code.

“Only Congress can fully close the loopholes” that wealthy individuals or corporations can take advantage of, Obama said.

He singled out Senator Rand Paul, a Republican and libertarian, who in years past has single-handedly blocked tax treaties or treaty updates between the United States and Spain, Japan, Britain, and other countries. Paul has been “a little quirky on this issue,” Obama said, and urged him “to stop blocking the implementation of tax treaties.”

Paul’s office did not immediately comment.

Reporting by Timothy Gardner, Jeff Mason and Susan Heavey; Writing by Doina Chiacu; Editing by Chizu Nomiyama