FOR IMMEDIATE RELEASE
February 2, 2015
FACT Statement on Administration Proposal on
Taxation of Foreign Corporate Profits
Washington, DC – The FACT (Financial Accountability and Corporate Transparency) Coalition today released the following statement on the Obama Administration’s proposal regarding the taxation of foreign corporate profits. The statement is from Executive Director Rebecca Wilkins:
“The President deserves credit for his ambitious proposal and there are some positive elements to it. A mandatory deemed repatriation is a good start and much better than the repatriation holidays offered by others. We are also happy to see that the temporary revenues from it won’t be used to finance a permanent reduction in the corporate rate.
But the 14% repatriation rate is simply too low and would be a windfall for multinationals that have aggressively booked profits offshore. And going forward the gap between the proposed 28% rate on corporate profits and the 19% minimum tax on foreign profits is too big and continues to create an extremely lucrative incentive for multinationals to stash profits offshore.
There are several strong anti-abuse provisions included in the President’s proposal designed to combat this offshore profit shifting, but one has to wonder how an Internal Revenue Service that is already being asked to do a great deal more with an even tighter budget can take on the additional responsibilities of enforcing rules designed to prevent these practices.
Unfortunately, the ambition doesn’t match the reality and the President’s proposal to tax foreign corporate profits misses the mark on several key concepts. When its merits are stacked against its shortcomings we can’t help but be disappointed as we were hoping for more.”
Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition unites civil society representatives from small business, labor, government watchdog, faith-based, human rights, anti-corruption, public-interest, and international development organizations. We seek an honest and fair corporate tax code, greater transparency in corporate ownership and operations, and commonsense policies to combat the facilitation of money laundering and other criminal activity by the financial system.