SNAP ANALYSIS - Obama takes first step in tax overhaul

By Steve Holland

WASHINGTON (Reuters) - President Barack Obama's move to curb overseas tax havens and job out-sourcing was his first major proposal in what promises to be a broad overhaul of the U.S. tax system.

* Obama chose a relatively populist initial step.

Americans have little sympathy for companies that park their money in places like the Cayman Islands in order to avoid paying U.S. taxes.

And they are even more fed up with companies who have benefited from tax incentives for shipping jobs overseas, blaming these policies for a broad erosion of the U.S. labour market.

* Not everyone agrees with his salvo at tax havens.

Daniel Griswold, an expert at the Cato Institute think tank, said locating affiliates in foreign markets is now the chief way that U.S. companies reach new customers outside the United States.

"This demagogic grab for more revenue will only cripple the ability of U.S. companies to expand their sales in global markets, putting in jeopardy the U.S.-based jobs that support their foreign affiliates," he wrote in a blog.

* Demands for more revenues to close a widening budget deficit and pay for government programs are driving what could turn out to be the biggest overhaul in the U.S. tax code since 1986.