WASHINGTON – Sen. Carl Levin, D-Mich., chairman of the Senate Armed Services Committee and the Senate Permanent Subcommittee on Investigations, and three cosponsors today will introduce legislation to close a host of offshore corporate tax loopholes, make the tax code fairer for small businesses and families and provide part of the foundation for a balanced deficit-reduction package to end sequestration.
The Stop Tax Haven Abuse Act, cosponsored by Sheldon Whitehouse, D-R.I.; Mark Begich, D-Alaska; and Jeanne Shaheen, D-N.H.; would provide in the neighborhood of $220 billion in additional revenue over 10 years, according to estimates from the Joint Committee on Taxation, by ending a series of tax gimmicks uncovered in a decade of work by the Permanent Subcommittee on Investigations.
The bill would stop tax-avoidance schemes such as transferring valuable intellectual property and the income they generate to offshore subsidiaries and the practice of setting up offshore shell corporations – often nothing more than a post office box – to claim foreign status for tax purposes.
“These corporate tax loopholes are unfair to domestic companies, small business and the families who must carry the extra burden that results when large multinational corporations use complex gimmicks to avoid taxes,” Levin said. “We should end these loopholes regardless of our budget situation, because they are blatantly unfair. But surely now, with sequestration continuing to damage military readiness, education, life-saving medical research and more, we should end these offshore tax avoidance schemes and use the revenue as part of a balanced plan to replace sequestration.”
“Big corporations shouldn’t be allowed to play games with the tax code and benefit from shipping jobs overseas,” Whitehouse said. “This bill would force corporations that are dodging their responsibilities to pay their fair share of taxes, and create an even playing field for American companies that already play by the rules.”