Multinational companies do not publicly report on where they are making their money or what taxes they are paying to whom. Investors, policymakers, and citizens have no idea exactly how they are gaming the system—what they tell us versus what they tell other countries. They should have to write it down in one place and report it on a country-by-country basis, so that the public, policymakers, and shareholders can see what they are really paying.
The Financial Accountability and Corporate Transparency Coalition (FACT Coalition) sent a letter to Rep. Lloyd Doggett and Sen. Sheldon Whitehouse Supporting H.R. 1932/S. 851; which would target egregious offshore exploitations. The full letter can be read below or downloaded here.
Tax haven abuse undermines the fairness of our tax code. By shifting profits to offshore tax havens, multinational corporations avoid over $100 billion in taxes each year. Wealthy individuals evade an estimated $40 to $70 billion. The Stop Tax Haven Abuse Act of 2017 (S. 851/H.R. 1932) will close many of the loopholes that allow multinational companies and the wealthy to play by a different set of rules than the rest of us.
Stop Tax Haven Abuse Act and Corporate EXIT Fairness Act Would Close Many of the Most Egregious Offshore Loopholes
WASHINGTON, D.C. – Congressional lawmakers introduced two measures Wednesday to close a number of offshore tax haven loopholes in a move welcomed by the Financial Accountability and Corporate Transparency Coalition (FACT Coalition).
Financial Accounting Standards Board Considers Shining a Light on Corporate Tax Practices
On March 17, Richard Phillips of the Institute on Taxation and Economic Policy (ITEP) and I traveled to Norwalk, Connecticut to participate in a roundtable discussion at the Financial Accounting Standards Board (FASB). This is a little-known, but highly influential body that sets the accounting standards for U.S. companies. The morning discussion focused on a proposal to increase disclosures on corporate financial statements, including new disclosures on revenues and taxes on a country-by-country level. This information is critically important if we are to tackle the problem of offshoring profits in tax havens.
We heard several participants assert that, before any new disclosures are required, board members must ensure they know why it is being required and for what the users of the information will use it. Fair questions.
Unfortunately, I am not sure the discussion on tax disclosures adequately answered them. The focus was more theoretical and principle-based with a heavy reliance on accountant-speak. I greatly appreciated the opportunity to participate, but I confess that I did not fully take the opportunity to offer an alternative perspective. Since hindsight is 20/20, here is what I should have said.
For years, the number one tax policy talking point from corporate lobbyists has been the claim that the United States has the highest corporate tax rate in the world. The story then goes that this high tax rate is driving away business and Congress should move to dramatically lower it.
A new study by the Institute on Taxation and Economic Policy (ITEP) reveals the reality that while corporations face a statutory tax rate of 35 percent, the tax code is so packed full of tax breaks that over eight years our nation’s largest and most profitable corporations paid an average effective tax rate of just 21.2 percent.
President’s Action Likely to Raise Costs on American Businesses, Undermine National Security
WASHINGTON, D.C. — Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement in response to President Donald Trump’s signing of a Congressional Review Act resolution of disapproval (H.J.Res.41).
