Dan Smith: New Bill Will Stop Companies from Stashing Profits in Tax Havens, Raise 600 Billion in Tax Revenues
Published on Feb 8, 2013 - 3:03:48 PM
Feb. 7, 2013 - WASHINGTON, Feb. 7, 2013 - Statement of U.S. PIRG Tax and Budget Advocate Dan Smith on today’s introduction of the Corporate Tax Fairness Act by Sen. Bernie Sanders (I-VT) and Rep. Jan Schakowsky (D-IL). Among other provisions, this legislation would stop corporations from being able to defer paying taxes on income earned offshore. The provisions in the bill have been scored as raising nearly $600 billion over ten years.
America's largest companies use accounting gimmicks to magically make their U.S. profits appear on the books of bogus shell companies in tax havens like the Cayman Islands. Ordinary taxpayers foot the bill for this corporate tax dodging in the form of cuts to public programs, more debt, or higher taxes. This legislation tackles the heart of the problem by ending incentives to shift profits offshore.
A new U.S. PIRG report released Tuesday revealed that companies that use offshore tax havens hurt ordinary tax payers twice, by dodging both state and federal taxes. These tax loopholes cost taxpayers $40 billion annually in state taxes and an estimated $150 billion in federal taxes. Instead of sitting in a P.O. box offshore, that revenue could be put to better use funding public priorities or reducing the deficit.
Some budget decisions are tough, but closing the offshore tax loopholes that let large companies shift their tax burden to the rest of us is a no-brainer. Congress should pass this legislation to level the playing field for small businesses, restore fairness to our tax system, and raise revenue to fund public priorities or cut the debt.
U.S. PIRG, the federation of state Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society. www.uspirg.org
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