There is widespread agreement, across the political spectrum, that the gaming of the tax code by multinational corporations is a problem. When profits and jobs are shipped offshore, we not only harm the U.S. economy, we fuel a tax haven industry that drains wealth around the world. We seek to fix the problem of large, well-connected interests gaming the tax system.
FACT policy director Zorka Milin was quoted by Bloomberg in their coverage of a new tax provision that restructures a tax break for U.S. companies’ foreign sales.
“They’re getting…an even more generous tax break for a policy that is untested,” Milin said. “It could…add a tax reward for something that companies might be doing anyway.”
While the 2025 tax law’s international tax provisions have been labelled “America-first”, in reality, most of the changes will lower the effective tax rates multinationals pay on foreign income, further incentivizing the movement of investment and income abroad.
Congress’ budget reconciliation bill becomes law, including trillions of dollars of highly regressive tax cuts for wealthy individuals and corporations at the cost of steep cuts to healthcare, food assistance, and climate programs.
Congress’ final reconciliation bill moves nearly every aspect of the tax code in the wrong direction, gutting essential programs and job-creating green energy incentives in favor of highly regressive tax cuts for wealthy individuals and multinational corporations.
Instead of undermining multilateral tax cooperation, Congress should address incentives in the U.S. tax code that encourage the offshoring of jobs and profits by American multinational companies.
Small steps in the right direction do not address the core problem of our international tax code: there is no reason to keep giving tax breaks to companies when they move profits and jobs overseas.
