Administration and Congressional Leaders Unveil Plan to Allow Multinationals to Pay Little-to-No Taxes on Profits Booked Offshore at Expense of U.S. Businesses and U.S. Taxpayers
WASHINGTON, D.C. — The White House and congressional leaders unveiled a joint tax plan today that would allow multinational corporations to pay little-to-no taxes on the profits they book offshore. Known technically as a ‘territorial’ tax system, the plan would result in an enormous offshore tax loophole and was criticized by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition). The FACT Coalition is a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.
Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement:
“The White House and congressional leaders unveiled a plan today that would create the largest offshore tax loophole in American history. Specifically, this plan will allow multinational corporations to pay little-to-no taxes on all profits that they book offshore by instituting what is known as a ‘territorial’ tax system. This system will forever incentivize multinationals to shift more and more profits to tax havens to take advantage of the loophole. Domestic and small American businesses and U.S. taxpayers will be forced to pick up the tab in higher taxes, greater debt, or cuts in services.
“The plan even acknowledges this problem — noting that committees may attempt to come up with rules to prevent it — however, other countries that have adopted lower tax rates for offshore profits have been unable to prevent corporations from using accounting gimmicks to book profits in tax havens. This is a tax plan that benefits the Cayman Islands and Switzerland far more than U.S. taxpayers.”
Notes to Editors:
- Read the joint “Unified Framework for Tax Reform”.
- Read ITEP’s new fact sheet on a “territorial” tax system.
- Read the FACT Coalition’s Q and A about “territorial” tax systems.
- Read an article from CBPP on how a “territorial” tax system could hurt U.S. workers.
- Read a new article from the Center for American Progress on how a “territorial” system would reward corporate tax avoidance.
Deputy Director, The FACT Coalition
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