Senators Introduce Bills to Plug Offshore Tax Loopholes, Reduce Outsourcing Incentives, and Boost Transparency

WASHINGTON, D.C. — Senate lawmakers introduced two pieces of legislation on Wednesday that would boost transparency of multinational corporations’ tax and employment practices while making it harder for companies to game the international tax system.  The measures were welcomed by the Financial Accountability and Corporate Transparency (FACT) Coalition, a non-partisan alliance of more than 100 state, national, and international organizations working toward a fair tax system that addresses the challenges of a global economy and promoting policies to combat the harmful impacts of corrupt financial practices.

Sponsored by Senators Amy Klobuchar (D-MN), Tammy Duckworth (D-IL), and Chris Van Hollen (D-MD), the Removing Incentives for Outsourcing Act (S.1610) would apply tax rates for profits booked offshore on a per-country basis — rather than on a worldwide average basis — reducing the chance of gaming. The legislation would also reduce the incentive to outsource jobs by eliminating the 10 percent tax break companies receive for moving real operations and assets offshore.

Sponsored by Sens. Van Hollen, Duckworth, Klobuchar, and Sheldon Whitehouse (D-RI), the Disclosure of Tax Havens and Offshoring Act (S.1609) would require that multinational companies registered with the Securities and Exchange Commission publicly disclose basic tax and financial information on a country-by-country basis.  An April 2019 report from the FACT Coalition noted that public “country-by-country reporting” was rapidly becoming the global norm.

Clark Gascoigne, the deputy director of the FACT Coalition, issued the following statement:

“These two bills take direct aim at some of the biggest problems with our international tax system.

“The Removing Incentives for Outsourcing Act would reduce the outrageous tax incentives that reward corporations the more they shift profits to tax havens and real operations offshore. Requiring that tax rates apply to multinationals’ offshore profits on a per-country basis is a necessary piece of any effort to end the incentive for offshore tax games.

“The Disclosure of Tax Havens and Offshoring Act would codify the emerging trend toward transparency on where multinational companies do business and pay taxes.  Shining a light on the offshore practices of corporations would help expose abusive tax schemes — protecting honest taxpayers, informing policymakers, and safeguarding investors.”

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Journalist Contact:

Clark Gascoigne
Deputy Director, The FACT Coalition
+1 202 810-1334
cgascoigne@nullthefactcoalition.org

Notes to Editors:

  • Click here for an online version of this release.
  • Click here to read the press release from Senators Klobuchar, Van Hollen, and Duckworth.