FACT Coalition: Close Offshore Tax Loopholes, Save Taxpayers Nearly $200 billion
February 11th, 2013
February 11th, 2013
Senator Carl Levin (D-MI) and Senator Sheldon Whitehouse (D-RI) Introduce CUT Loopholes Act
WASHINGTON DC – In the midst of a Congressional and White House showdown over the impending sequestration, and growing calls for corporate tax reform, Senator Carl Levin (D-MI) and Senator Sheldon Whitehouse (D-RI) put forth the Cut Unjustified Tax Loopholes Act (S. 268, CUT Loopholes Act). This bill, which closes loopholes and strengthens enforcement measures against offshore tax haven abuse, could raise nearly $200 billion over ten years.
While large multi-national corporations are making record profits, many of them take advantage of a tax code riddled with loopholes that helps them winnow their tax bills down significantly. In fact, thirty Fortune 500 companies paid no federal income taxes in 2008-2010 while collectively earning almost $160 billion in profits, according to financial data analyzed byCitizens for Tax Justice. Offshore tax abuses cost the U.S. Treasury an estimated $150 billion per year in lost revenues.
The Financial Accountability and Corporate Transparency (FACT) coalition, which actively works on the issues of offshore tax haven abuse and anonymous corporations, supports S.268 due to key provisions such as:
“Offshore tax loopholes hurt domestic businesses, large and small, as well as individual taxpayers who must shoulder the extra tax burden through higher taxes and and endure massive cuts to public services,” said Nicole Tichon, Executive Director of Tax Justice Network USA and a co-founder of the FACT Coalition.
Eric LeCompte, Jubilee USA Network’s Executive Director, stated, “Every year, some of the most profitable corporations use a long list of loopholes to avoid paying taxes. With the sequester right around the corner, the CUT Loopholes Act will cut the loopholes and generate billions of dollars to avoid the next cliff. Further, this legislation sends a global message that corporate tax dodging should not be tolerated in any corner of the world.”
“Illicit financial flows are a major facilitator of poverty, crime, and corruption in both developed and developing countries. Tax haven secrecy drains nearly $1 trillion from developing countries each year. This is money that could have been spent on health care, education, and infrastructure in the world’s poorest countries while simultaneously shoring up budget deficits in Europe and the United States. The CUT Loopholes Act would be a tremendous step forward in curtailing these damaging illicit financial flows,” said Raymond Baker, director of Global Financial Integrity, a Washington DC-based research and advocacy organization.
It is also clear that there is broad support among American voters for closing offshore tax loopholes to deal with budget problems.
In a December 2012 national poll* conducted by the Mellman Group and commissioned by Friends of the Earth U.S, American voters said that an overwhelmingly majority, 75%, favor closing offshore tax havens as a way of addressing our national budget problems. Support for this proposal was high across party and ideological lines, as well as gender, race, educational background, and region.
Respondents were asked: “To help solve our budget problems, do you favor or oppose closing loopholes that allow corporations to declare profits in foreign countries that have a lower tax rate?” Fully three-quarters of voters favored the proposal with nearly two-thirds favoring it strongly.
The FACT coalition has made several reports, resources and survey results available supporting the case that corporate loopholes are raiding the U.S. Treasury, hurting small businesses, hurting developing countries and are kept in place by hefty campaign contributions and lobbying.
Notes for Editors: