WASHINGTON, D.C. — The U.S. House Ways and Means Committee unveiled legislation Thursday that would overhaul the U.S. tax system. According to the Financial Accountability and Corporate Transparency (FACT) Coalition, the bill would reward corporations that have shifted profits to tax havens. The proposal would also create new measures to tax future profits booked offshore at either zero or ten percent, depending upon how the income is classified. These low rates for offshore income contrast with a higher rate – 20 percent for domestic businesses. The Coalition is still reviewing the plan to evaluate the full impact of the international tax provisions.
Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement:
“This bill appears to be a gift to the multinational companies that have dodged taxes for years by offshoring profits and jobs. It rewards those corporations that have booked trillions of dollars overseas with a special 12 percent tax rate on their past offshore profits. Worse, the bill grants an even lower rate — a mere 5 percent rate — for the companies that have outsourced real investments abroad. There is no economic justification for a lower rate on profits already made.
“The most dangerous parts of the plan are how they treat offshore profits moving forward. The proposal permanently gives multinational corporations a tax rate that is, at most, half the rate for small and domestic businesses. Many multinationals will be able to pay zero percent on their profits booked offshore.
“The lower offshore rate will only incentivize large corporations to book more and more profits offshore and outsource production and jobs to tax haven countries like Switzerland and Ireland. These tax giveaways hurt small businesses and middle-class taxpayers who will pay in some combination of higher taxes, larger deficits, and cuts to services they use.
“While we appreciate some of the base erosion measures in the bill, they won’t fix the problem. In closing one offshore loophole, the bill has opened up another, offsetting any potential benefits to stop the gaming of the tax code. This legislation is simply out of step with the American people, who overwhelmingly believe that multinational corporations should pay the same rate, if not more, on the profits they book overseas as they do on their profits earned at home.”
Deputy Director, The FACT Coalition
+1 202 827-6401
Notes to Editor: