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Statement of U.S. PIRG Tax and Budget Advocate Dan Smith on the tax reform proposal released by the Chairman Camp of the House Ways and Means Committee.
“At a time when multinational giants are shifting profits offshore at an alarming rate to avoid billions in taxes, Chairman Camp’s bill would make our loophole-ridden corporate tax code even worse.
“For years, armies of lawyers at multinational giants have made profits made in America appear on the books of shell companies in tax havens like the Cayman Islands. American multinationals avoid an estimated $90 billion a year in taxes by exploiting these loopholes.
“Camp’s proposal would significantly increase already-big incentives for companies to book profits offshore. Right now companies can defer paying taxes on profits they claim are made offshore until they want to use that money to pay dividends to shareholders or for U.S. investments. Camp’s plan would create a so called “territorial” tax system where companies would never have to pay taxes on profits booked offshore, making the payoff for exploiting loopholes even greater.
“Despite a few fig leaf reforms meant to address offshore tax dodging, they amount to trying to dam up a river with a few twigs. A territorial tax system – plain and simple – means offshore tax dodging made easy.
“Average taxpayers and responsible small business owners foot the bill for corporate tax dodging through cuts to public programs or higher taxes. To cover the estimated $90 billion lost to offshore tax havens, U.S. PIRG found that the average American small business would have to pay an extra $3,067.
“A new report released today shows that the last thing taxpayers should be paying for is more tax breaks for the companies that have the most tax lawyers and lobbyists. Citizens for Tax Justice found that 26 companies – including GE, Boeing, and Verizon – paid nothing in federal income taxes over a five year period, despite earning $170 billion in profits.
“Taken as a whole, Camp’s proposal fails the American public. Congress should take aggressive measures to crack down on tax haven abuse – like those put forth by Senator Levin in the Stop Tax Haven Abuse Act – instead of expanding the loopholes.”
Click here for a study revealing that 82 of the top 100 publicly traded companies use tax havens.
Click here to read a letter signed by 538 state and national organizations from 40 states in support of the Stop Tax Haven Abuse Act.
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