FOR IMMEDIATE RELEASE
January 13, 2015
FACT Coalition Lauds Introduction of
Stop Tax Haven Abuse Act
Bill Would Prevent Corporations and Wealthy Individuals
From Using Tax Havens to Avoid Taxes
Washington, DC – The FACT (Financial Accountability and Corporate Transparency) Coalition today welcomed the introduction by Senator Sheldon Whitehouse (D-RI) and Rep. Lloyd Doggett (D-TX) of the Stop Tax Haven Abuse Act, which would close a number of loopholes used by corporations and wealthy individuals to avoid taxes.
Last year, a U.S. PIRG/Citizens for Tax Justice report found that at least 82 of the top 100 publicly traded U.S. companies have subsidiaries in offshore tax havens. And the Senate Permanent Subcommittee on Investigations has previously estimated that, altogether, tax-avoidance schemes involving tax havens cost taxpayers $100 billion every year. New estimates put the amount of lost revenue as high as $160 billion: $90 billion from corporate tax avoidance and another $40-$70 billion from individual tax evasion. The legislation introduced today closes the most egregious offshore tax loopholes.
“For far too long these loopholes have allowed wealthy individuals and large multinational companies to avoid the taxes they should be paying,” said FACT Executive Director Rebecca Wilkins. “Congress should pass this legislation immediately to stop this egregious tax dodging and to restore fairness to our tax system.”
Key provisions of the Stop Tax Haven Abuse Act include:
- Stopping U.S. companies that are managed and controlled in the U.S. from claiming to be foreign to avoid taxes.
- Closing loopholes that allow high-tech and pharmaceutical companies to license the patents for their products to sham shell companies in tax havens so they can book their profits there and avoid taxes.
- Requiring full and honest reporting from companies to determine if they’re booking profits to places where they are doing legitimate business, versus a P.O.-Box tax haven subsidiary with no employees.
- Modify rules relating to inverted corporations by making it more difficult for companies to avoid U.S. taxation by merging with foreign firms and by restricting earnings stripping after a merger.
“Businesses should compete based on the quality of their products, not the cleverness of their tax attorneys,” said Jaimie Woo, U.S. PIRG Tax and Budget Advocate. “Congress has for too long sat idly by allowing corporations to repeatedly avoid their taxes — it’s about time our elected officials start looking out for the public interest by immediately passing this bill.”
“When corporations avoid paying taxes, they avoid their responsibility to contribute to the communities where they operate,” said Eric LeCompte, Executive Director of the religious development agency, Jubilee USA Network. “Senator Whitehouse and Representative Doggett are moving critical legislation that promotes corporate responsibility and transparency.”
“Large corporations need to be held accountable to the communities they serve. Moving your business to offshore tax havens betrays the people who work hard to keep our economy on the right path and leaves small business owners and community members footing the bill for local infrastructure,” said Andrew Lytle, owner of Receptor Sound & Lighting in Dunedin, FL and a member of the Main Street Alliance.
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.