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First Gambit in Tax Reform Debate a Threat to Taxpayers

A Recent Executive Order Threatens to Roll Back Safeguards against Offshore Tax Avoidance
The tax reform battle in Congress is looking to be a long, hard-fought one, but the president’s recent executive order shows that there may be no need to wait to start giving huge tax breaks to corporate giants.

The executive order, signed late last month, calls on the Treasury Department to review all “significant” tax regulations issued on or after January 1, 2016. Included in this window are rules curtailing earnings stripping and corporate inversions for the purpose of tax avoidance.

 

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The Trump Administration Should Not Reopen Offshore Loopholes Closed by Recent Regulations

A new executive order signed by President Donald Trump on Friday asks that Treasury Secretary Steven Mnuchin review significant tax regulations issued in 2016. The broader context of the order is that President Trump is seeking to roll back regulations across the government – many of which he claims are overly burdensome – and could potentially target critical Treasury regulations such as two recent rules curbing corporate inversions. Any attempt to reopen tax loopholes closed by recent regulations would be counterproductive to the goal of creating a fair tax system and should be rejected.

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Tax Day for You, Tax Holiday for Multinationals

State Legislators are Increasingly Stepping in to Combat Offshore Tax Haven Abuse
It’s Tax Day. Odds are, you’ve already filed your taxes. Maybe you filed through a tax filing software, or maybe you hired an accountant to help you puzzle through the deductions you might be eligible for. Or, maybe you filed yourself, old-school-style, filling out your 1040 in your kitchen. Or, maybe you forgot, and this blog will serve as a last-second reminder—go file your taxes!

All of this is to say: you’ve fulfilled your tax responsibilities.  No doubt, the biggest corporations have filed theirs’s too.   But, unlike you, they have an army of accountants to ensure they take advantage of every last loophole and gimmick to cut down on their tax liability to near nothing.

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Big-League Tax Dodging

The U.S.’s top 50 public corporations have $1.6 trillion stashed offshore, and current tax reform proposals by President Trump and Congressional leadership will only make the problem worse.
This week, millions of Americans are filing their tax returns and mailing Uncle Sam a check.   At the same time, the 50 biggest public companies in the U.S., including Pfizer, Goldman Sachs, GE, Chevron, Walmart, and Apple, are avoiding taxes while their huge pile of offshore cash grows.

In a new report called “Rigged Reform” Oxfam used corporate financial, lobbying, and investor disclosures to reveal that the 50 largest U.S. companies used an opaque and secretive network of at least 1,751 subsidiaries in tax havens to avoid paying their fair share of taxes.

Resisting calls to “drain the swamp,” these companies sink deep in the DC muck and mire—with eye-popping results.  The report, which updates Oxfam’s analysis from our “Broken at the Top” report last year, reveals that since 2009, these 50 companies alone have spent $2.5 billion in federal lobbying—almost $50 million for every member of Congress.  Oxfam estimates that for every $1 these companies spent lobbying on tax issues, they received an estimated $1,200 in tax breaks.

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The Tax (Avoidance) Day is Approaching

On Tuesday, Americans Will Pay More in Taxes Because One Group Shirks its Civic Responsibility: Multinational Companies
Though they probably don’t all agree on every detail, most Americans see paying taxes as a civic duty.  Even so, it’s unlikely very many enjoy the paperwork and stress involved with Tuesday’s looming tax deadline. With few days left to go, millions of Americans are sitting down to get everything just right, and make sure they are paying what they owe—and not a penny more.

Wanting to minimize your tax liability is not unreasonable. Less reasonable is spending billions lobbying congress to create loopholes to be exploited in order to avoid nearly all of the taxes you would have otherwise been required to pay.  Playing within the rules to reduce liability is one thing, but actively changing the rules of the game to eliminate liability altogether — while middle-class Americans and small businesses pay full fair — is objectively unfair.

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On First Anniversary of Panama Papers Release, What Have We Learned?

This week marks the anniversary of the Panama Papers, a leak of more than 11 million documents exposing widespread corruption and illicit financing involving 140 public officials in more than 50 countries around the globe.  The leak, large as it was, included documents from just one law firm and had reverberations worldwide.  The impact was profound, but was it enough?  And what did we learn?

For those not steeped in money laundering practices and illicit financial flows, the Panama Papers showed the world how it all works.  If you want to finance terror; steal from taxpayers; traffic in humans, weapons, or drugs; or evade taxes, anonymous shell companies are the vehicle of choice.  The Panamanian law firm Mossack Fonseca showed that these entities were easy to set up, inexpensive to maintain, and able to provide legal secrecy even if covering up underlying illegal activity.

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