FOR IMMEDIATE RELEASE
May 1, 2015
Two Strikes and You’re Out?
JCT and Paul Ryan Put the Repatriation Tax Holiday Behind in the Count
Washington, DC – With two different and devastating announcements this week from the Joint Committee on Taxation and House Ways and Means Chairman Paul Ryan, the FACT (Financial Accountability and Corporate Transparency) Coalition believes the flawed proposal of a repatriation tax holiday has two huge strikes against it and is enough to declare it “Out!”
A proposal from Senators Barbara Boxer (D-CA) and Rand Paul (R-KY) would offer a repatriation tax holiday of 6.5 percent (as compared to the 35 percent statutory rate) to entice corporations to bring foreign profits “back” to the United States and use the funds to pay for repairs and improvements to infrastructure and the Federal Highway Trust Fund.
However, first Paul Ryan made it clear that such a plan would only be considered in the context of broader tax reform. And if that weren’t enough, the Joint Committee on Taxation released its cost estimate on the idea and said that the plan would cost taxpayers $118 billion.
“There are two massive strikes against the repatriation idea,” said FACT Coalition executive director Rebecca Wilkins. “And in this case, two strikes is enough to call it out. This plan is out of the game and deservedly so. “
“Not only would it end up costing us money instead of generating revenue, the idea of giving corporations a massive discount on the taxes they should have paid anyway is blatantly unfair to individual taxpayers, small businesses, and domestic firms that are already paying their fair share,” continued Wilkins.
“America should not be incentivizing future tax avoidance by opening the door for corporations to repatriate hoarded profits without paying their fair share of the cost of government,” said Susan Harley, deputy director of Public Citizen’s Congress Watch division. “The Joint Committee on Taxation’s negative $118 billion score proves what most of us already know: repatriation holidays are a losing proposition.”
“Fortune 500 companies are avoiding an estimated $600 billion in taxes by holding money offshore.” said Richard Phillips a Policy Analyst at Citizens for Tax Justice. “Instead of rewarding this tax avoidance with another repatriation holiday, Congress should be require that these companies pay taxes on their foreign profits as they are earned.”
Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition unites civil society representatives from small business, labor, government watchdog, faith-based, human rights, anti-corruption, public-interest, and international development organizations. We seek an honest and fair corporate tax code, greater transparency in corporate ownership and operations, and commonsense policies to combat the facilitation of money laundering and other criminal activity by the legitimate financial system.