Several small business groups sent a joint letter to the OECD regarding its ongoing consultation on tax standards in support of increased global tax transparency.
33 members of Congress sent a letter to the OECD supporting implementation of Country-by-Country Reporting rules in the OECD tax transparency guidelines. The full letter can be read below or downloaded here. ____________________ Download Letter as PDF March 6, 2020 Mr. Angel GurríaSecretary-General, OECD2, rue Andre Pascal75016 ParisFrance RE: Public Consultation: Review of Country-by-Country Reporting (BEPS …
As August recess wraps up, the prospect for action on beneficial ownership is becoming more likely. In June the Corporate Transparency Act (H.R. 2513) passed out of the House Financial Services Committee by a bipartisan vote of 43-16. It’s sister bill (S.1978) was introduced in the Senate. Two beneficial ownership transparency bills, the TITLE Act (S.1889) and a discussion draft of the ILLICIT CASH Act, have been the subject of hearings. FACT’s Executive Director Gary Kalman testified before the Senate Banking Committee in June to address, among other issues, the impact of legislation on small business. He noted that “more than three quarters of small business owners felt the tradeoff — reporting burden vs. the prevention of unfair competition from anonymous shell companies — was worth it.”
The Corporate Transparency Act (H.R. 2513), a bill to end the abuses of anonymous companies, went before the House Financial Services Committee for markup on June 11th. FACT voiced its support for the bill in a letter to the House Financial Services Subcommittee on National Security earlier this year. Over 100 other organizations signed a letter in support of the bill, more than double the number that sent a similar letter last year. In addition to the broad support collected of a decade, new letters came from the National Sheriffs’ Association (NSA), the Anti-Insurance Fraud Coalition, the American Land Title Association, over 60 national security experts and others.
This past week, FACT Coalition member Global Financial Integrity released a report with a comprehensive state-by-state comparison of what information is required to set up a company versus obtain a library card. Astonishingly, in every state, far more personal information was needed to set up a library card than a company. This is especially startling when you realize the extent to which a company—without an accountable individual attached—could be used to commit crimes with impunity.
This report came just a week after the House Financial Services Committee’s subcommittee that covers national security issues held a hearing on corporate transparency and efforts to fight money laundering. In the lead up to the hearing Representative Carolyn Maloney (D-NY) released a discussion draft of the Corporate Transparency Act of 2019, which would require the collection of beneficial ownership information. All the witnesses at the hearing supported the collection of beneficial ownership information as an important anti-corruption, anti-money-laundering tool. In fact, all but one witness who testified at hearings in this and the previous Congress in which corporate transparency was discussed have said that beneficial ownership disclosure was an important anti-money-laundering measure. In a blog discussing this month’s hearing, FACT’s Gary Kalman encouraged lawmakers to this time listen to what the witnesses have to say. Anti-human trafficking, faith, and law enforcement organizations also encouraged the committee to take action on anonymous companies.
This week marks the one-year anniversary of the release of The Paradise Papers, a leak that included 13 million documents from a large offshore law firm. The leak detailed a number of tax avoidance techniques used by the wealthy and multinational corporations to avoid taxes. At the same time, Congress was rushing to pass the Tax Cuts and Jobs Act.
In light of the Paradise Papers revelations, we encouraged lawmakers to carefully review the information from the leak and consider whether their overhaul would address the tax dodging practices exposed. They chose not to do so.
Unlike the earlier Panama Papers story, where Americans were notably absent, the Paradise Papers had clear U.S. connections. There was extensive data on the tax avoidance schemes of at least 31,000 U.S. citizens, residents, and companies including household names like Apple, Nike, and Uber. Rather than consider lessons to be learned around how policies might work in practice, lawmakers chose to ignore the warning signs. The tax law passed just over a month later with minimal attention paid to any of the insights to be gleaned from the leak. It should not be surprising that the law continues to encourage multinational corporations to engage in offshore tax schemes.
