Posted On: March 10, 2017 by Newshound
Category: Breaking News Commentary Featured Finance Government Politics
WASHINGTON, March 9 – Citing new evidence that many profitable corporations evade paying any U.S. income taxes, Sens. Bernie Sanders (I-Vt.) and Brian Schatz (D-Hawaii) Thursday introduced a bill to eliminate tax breaks that encourage corporations to shift jobs and profits offshore. Rep. Jan Schakowsky (D-Ill.) introduced a companion bill in the House.
In addition to closing loopholes, the Corporate Tax Dodging Prevention Act would tax the $2.4 trillion that American corporations currently hold offshore at the full corporate tax rate of 35 percent.
The Institute on Taxation and Economic Policy released a report Thursday showing that 100 large, profitable corporations paid zero or less in federal income taxes at least once in the last eight years. Eighteen corporations, including General Electric, International Paper, Priceline.com and PG&E, received tax refunds from the IRS on their combined profits from 2008 to 2015.
The study also found that 48 corporations paid an effective tax rate of less than 10 percent over that period. On average, large, profitable corporations in the United States paid an effective federal income tax rate of 21.2 percent over the eight-year period, slightly over half than the statutory 35 percent tax rate.
“Here’s the simple truth. You can’t be an American company only when it benefits you. You also have to be an American company when it comes to paying your fair share of taxes,” Sanders said. “Instead of giving a $550 billion tax break to corporate tax dodgers as President Trump has proposed, our legislation will raise at least $1 trillion in new revenue over the next decade.”
“Every year, we give over $100 billion in tax breaks to multinational corporations that send profits and jobs overseas,” said Schakowsky. “The Corporate Tax Dodging Prevention Act closes those loopholes and makes multinational corporations pay the taxes they already owe on offshore profits. I am proud to join Sens. Sanders and Schatz in our effort to make our tax code fairer and generate much-needed revenue to invest in priorities for America’s working families.”
The legislation would end the rule allowing American corporations to avoid paying U.S. taxes on profits they hold offshore. This would end the incentive for companies to stash profits in tax havens like Bermuda and the Cayman Islands.
The bill would make several other reforms, including a ban on American corporations pretending to be foreign companies for tax purposes by inverting or by using a post office box in an offshore tax haven as an official headquarters.
Abuse of offshore tax havens is one reason why American corporations today pay far less than the 35 percent tax rate that is supposed to apply to their profits.
The legislation is supported by the AFL-CIO, Public Citizen, Americans for Tax Fairness, U.S. Public Interest Research Group, the American Federation of State, County and Municipal Employees (AFSCME), the Institute on Taxation and Economic Policy and several other organizations throughout the country.
To read the bill, click here.
To read a summary of the bill, click here.
To read a list of the top 12 corporate tax dodgers, click here.