Coca-Cola CEO Warns Taxing Overseas Profits Would Hurt US Economy

WASHINGTON -(Dow Jones)- The chairman and chief executive of Coca-Cola Co. warned Wednesday that the Obama administration's plan to take on tax breaks for companies operating overseas will hurt the U.S. economy.

Muhtar Kent said raising taxes on profits earned abroad would make U.S. multinationals less competitive and end up reducing investment at home.

In prepared remarks to the Economic Club of Washington, Kent said he and many others share "a deep concern" about a proposal to curb a tax break known as deferral, which allows firms to postpone taxes on their foreign income as long as they don't repatriate it.

"Under proposals now being considered here in the U.S., the benefits of deferral would be further restricted to put U.S. companies at an even greater disadvantage versus their foreign competitors operating under territorial tax systems," he said.

Kent said he supports a fair and equitable tax system that would help ease the fiscal pressures facing the U.S.

"But having one of the highest corporate tax rates in the world today--and having a system of foreign income taxation that is more onerous than that of any other developed country--does not bode well for America's future," he said.

Business groups lobbied successfully to ensure that the recent health-care reform bill wasn't funded in part through a crackdown on foreign tax breaks.

-By Tom Barkley, Dow Jones Newswires