FOR IMMEDIATE RELEASE
January 16, 2014
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Contact: Nick Jacobs
The FACT (Financial Accountability and Corporate Transparency) Coalition along with partners from small business, faith, labor and public interest groups submitted a formal response to Chairman Max Baucus (D-MT) and the Senate Finance Committee, calling his proposed changes to the international tax system as falling short “…in three critical ways and leaves room for the offshoring of jobs and profits to continue.”
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 plan reflects a constant drumbeat from corporations that rates need to drop in order for them to compete. “When many large multinational corporations are already paying little or no tax, it’s tough to make the argument that they deserve a rate reduction,” said Nicole Tichon, director of the FACT Coalition. “The plan does address some of the worst abuses and gamesmanship, but without knowing the immediate and longer-term discounted tax rates on earnings, there’s a danger of rewarding bad actors.” “It’s hard to support a short term fix when we need a long term fix,” said Eric LeCompte, Executive Director of Jubilee USA Network, a faith-based antipoverty organization. “In order to protect the poor, we believe we need to permanently end corporate offshore tax avoidance.” FACT small business partners note the lack of revenue. “Sen. Baucus’ proposal on offshore tax havens doesn’t raise enough revenue, which restricts our ability to invest in our economy,” said David Levine, CEO of the American Sustainable Business Council. “Our scientific, national polling shows that more than 90 percent of all small business owners see overseas tax loopholes as a problem.” The coalition also supports separate and ongoing efforts to end offshore tax abuses, some of which were included in Mr. Baucus’ discussion draft. “Congress doesn’t need to wait for comprehensive tax reform to put an end to loopholes like ‘check-the-box.’ Senator Levin’s Stop Tax Haven Abuse Act (S.1533) closes the most egregious offshore tax loopholes, saving taxpayers over $220 billion over the next decade. Lawmakers looking to cut the deficit should start there,” said Dan Smith, U.S. PIRG Tax and Budget Advocate. Click here to read a letter signed by 538 state and national organizations from 40 states in support of the Stop Tax Haven Abuse Act.
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.