“No Tax Breaks for Outsourcing Act” Would Close Loopholes in Tax Code that Encourage Offshore Tax Avoidance
WASHINGTON, D.C. – New legislation introduced Tuesday would equalize the tax rates for domestic businesses and multinational corporations — reducing the tax incentives to shift jobs and profits overseas that were enacted under the recent tax overhaul, according to the Financial Accountability and Corporate Transparency (FACT) Coalition.
Sponsored by House Ways and Means Tax Policy Subcommittee Ranking Member Lloyd Doggett (D-TX), and Senate Finance Committee Member Sheldon Whitehouse (D-RI), the No Tax Breaks for Outsourcing Act (H.R.5108 / S.2459) would equalize the tax rates for profits booked at home and abroad, repeal the tax deduction on profits earned from investments overseas, eliminate the tax break for foreign oil and gas extraction income, and institute a number of provisions aimed at combatting corporate inversions.
Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement:
“This bill ends the backward incentives created by the new tax law to move jobs, profits, and operations overseas.
“The simple fix — to even up the rates — levels the playing field for domestic companies and reverses some of the worst damage caused by the new law.
“It wasn’t that long ago that there was justifiable outrage over tax rules that allowed billionaire Warren Buffett to pay a lower tax rate than his secretary. We should be equally concerned that the new law means the richest multinationals will pay lower rates than their smaller, wholly domestic counterparts. The new system is backwards.
“Under the old rules, companies paid the same U.S. tax rate whether they booked their profits in Indiana or Ireland. Now, multinationals pay a 21% rate on the profits they book in the U.S. but a 10.5% rate on the profits they book overseas. The real kick in the gut for workers is that companies can get even that discounted overseas rate down to 0% if they move enough production and jobs offshore.
“The No Tax Breaks for Outsourcing Act is an important response to the tax law’s misguided incentives for companies to move jobs, profits, and operation overseas.”
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Journalist Contact:
Clark Gascoigne
Deputy Director, The FACT Coalition
+1 202 810-1334
cgascoigne@thefactcoalition.org
Notes to Editor:
- Read a press release from Rep. Doggett.
- Read FACT’s latest Briefing Memo: Ending Offshore Tax Avoidance.