Groups Take Message of Offshore Tax Haven Abuse and
Dangers of Anonymous Companies to Lawmakers
FACT Coalition Advocacy Days on Capitol Hill
WASHINGTON, DC – Faith leaders, small business owners, activists, and others will be fanning out across Capitol Hill to tell lawmakers in both chambers and in both parties of the impact that offshore tax haven abuse and the use of anonymous shell companies are having on communities as the FACT (Financial Accountability and Corporate Transparency) Coalition kicks off its Advocacy Days.
FACT Coalition partners U.S. Public Interest Research Group (USPIRG), Jubilee USA Network, the Main Street Alliance, the American Sustainable Business Council, and Fair Share have all brought members to Washington to meet with lawmakers for the Advocacy Days, which start today and run through Wednesday, March 26.
Offshore Tax Haven Abuse
These issues are particularly relevant as Congress will soon be considering whether to extend two egregious offshore tax breaks that will cost taxpayers $90 billion over the next decade. One of them is a big part of the reasons that GE has managed to pay nothing in federal income taxes over the last five years.
“Members and Congressional staffers are hearing from an army of corporate lobbyists seeking to keep their loopholes. It’s high time that they hear from the voices of regular people being forced to foot the bill to pay for these tax breaks,” said FACT Coalition Director Nicole Tichon.
The Stop Tax Haven Abuse Act (S. 1533), introduced by Senator Carl Levin (MI), would close the most egregious loopholes that incentivize corporations to continue avoiding taxes in every corner of the globe and would promote international corporate transparency. The bill was also introduced in the House by Representative Lloyd Doggett under the same title, and is H.R. 1554.
“People of faith believe that our economy should serve all of us and protect the vulnerable. Unfortunately, corporate tax avoidance is a theft from our kids and the poorest among us,” said Eric LeCompte, executive director of the Jubilee USA Network.
“As Congress considers whether to renew two egregious offshore loopholes that are part of the so called ‘tax extenders,’ we hope our elected leaders get the message that offshore tax dodging is not a victimless offense, said U.S. PIRG Tax and Budget Advocate Dan Smith. When large multinationals use loopholes to shrink their tax bill, average taxpayers and small business owners have to pick up the tab through cuts to public programs, higher taxes, or more debt.
“What would you do with $150 billion dollars?” asked Rebecca Wilkins, senior counsel for federal tax policy atCitizens for Tax Justice. “That’s what offshore tax haven abuse is estimated to cost the U.S. Treasury each year.”
“Few tax issues anger small and mid-sized business owners more than the loopholes for overseas tax havens,” said Bryan McGannon, deputy policy director for the American Sustainable Business Council, which with its organizational partners represents more than 200,000 businesses in the United States. “Companies that use these loopholes can pay much lower taxes, or in some cases no taxes, while their smaller counterparts must pay more. It’s unbelievable that some in Congress think that’s OK,” he said.
“When times are tough, everyone needs to do their part. Yet, even as kids and families are forced to make sacrifices in the name of deficit reduction, corporations continue to use offshore tax havens to avoid paying taxes. It may not be illegal, but it certainly isn’t right,” said Sean Garren, legislative director at Fair Share. “This week, Congress is going to have to face their constituents here in DC and tell us what they will do about it.”
Anonymous Shell Companies
Additionally, there are bills in the House and Senate that would stop criminals, scammers, fraudsters, and big campaign donors from hiding their identity behind layers of anonymous shell companies. The Incorporation Transparency and Law Enforcement Assistance Act, (S. 1465, H.R. 3331), has already attracted bipartisan support.
“Anonymous companies are the getaway cars for financial crime, and it is time for Congress to take away the keys!” said Stefanie Ostfeld, Global Witness Senior Policy Advisor. “Shining a light on the ultimate owners of companies would be transformative for millions of people living in resource rich developing countries, where government revenues are all too often siphoned offshore by corruption and tax evasion facilitated by anonymous companies.”
Last week, Global Witness co-founder Charmian Gooch was awarded the prestigious TED Prize, and she pledged to spend the $1 million gift on the organization’s global campaign to eliminate anonymous shell companies. The honor adds to the growing momentum behind banning the incorporation of phantom firms. The United Kingdom announced in October that it would be eliminating the incorporation of anonymous shell companies in the UK, and, earlier this month, the European Parliament voted overwhelmingly in favor of requiring the public disclosure of the true, human, beneficial owners of all EU companies.
“The U.S. is the second easiest place in the world, next to Kenya, for someone to create an anonymous shell company to launder illicit proceeds,” noted Josh Simmons, policy counsel at Global Financial Integrity. “These phantom firms are used by terrorists, drug traffickers, and kleptocrats to shield their ill-gotten-gains from law enforcement. They’re used by fraudsters to pillage millions of dollars from Medicare each year and by SuperPACs to anonymously spend huge amounts of money to secretly influence our political system. Now is the time for Congress to move to pass legislation to protect the American people from criminals laundering their proceeds through the U.S. financial system.”
Global Financial Integrity
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