FOR IMMEDIATE RELEASE
November 19, 2013
Contact: Nick Jacobs
+1 (202) 841-1466
While citing progress in terms of closing offshore tax loopholes, the Financial Accountability and Corporate Transparency (FACT) coalition believes that the tax reform discussion draft introduced by Senate Finance Committee Chairman Max Baucus falls short when it comes to permanently ending incentives for America’s biggest multinational corporations to shift jobs and profits offshore. The coalition found the proposal to lack some critical details.
The three areas of concern raised are:
- It does not sufficiently end incentives for multinational corporations to shift profits offshore, which costs taxpayers an estimated $90 billion per year and creates an uneven playing field for small and domestic businesses.
- It is revenue neutral, earmarking all the revenue raised from closing loopholes for reductions in the corporate tax rate. With federal revenue from corporations hovering at multigenerational lows, precisely because of the offshore profit shifting incentives, this is unacceptable.
- It should hold corporations accountable to report their profits and revenues in a consistent manner to government, shareholders and the public.
The full letter to Chairman Baucus and the Senate Finance Committee can be found here. For many years, corporations have exploited provisions of the U.S. tax code, to move profits on paper to tax havens and ultimately pay little, if anything, in U.S. corporate tax. All told, American companies have close to $2 trillion in profits offshore. Academic experts estimate that the U.S. loses $90 billion in revenue annually from tax haven abuse by large multinational corporations. “The current system is not sustainable as it drains much-needed jobs and revenues from our country,” said FACT Coalition Director Nicole Tichon. “Reforming the way the U.S. taxes our multinational corporations should require more, not less, from the companies that benefit from all of the advantages of doing business here. This is an opportunity that Congress and the American people cannot afford to miss.”
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 legitimate financial system.