Senator Bernie Sanders (I-Vermont) today introduced a bill to stop profitable corporations from sheltering income in the Cayman Islands and other tax havens. The legislation also would end tax breaks for companies that ship jobs and factories overseas.
Sanders’ bill and a companion measure to be introduced in the House by Rep Jan Schakowsky would yield more than $590 billion in revenue over the next decade nationwide, according to the Joint Committee on Taxation.
‘ At a time when we have a $16.5 trillion national debt and an unsustainable federal deficit; at a time when roughly one-quarter of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high, it is past time for corporate America to contribute significantly to deficit reduction,’ said Sanders, a member of the Senate Budget Committee.
Sanders was joined at the news conference by Bob McIntyre, director of Citizens for Tax Justice; Damon Silvers, the policy director for the AFL-CIO; and Dorigen Hoffman, policy director for the Norwich, Vermont-based Clean Yield Asset Management.
‘ We strongly support Senator Sanders’ bill to crack down on offshore tax havens and to stop rewarding companies for shipping American jobs overseas. This legislation is long overdue. It will level the playing field and make sure that large corporations pay their fair share in taxes,’ Hoffman said at the news conference in the Capitol.
Under current law, U.S. corporations are allowed to defer or delay U.S. income taxes on overseas profits until the money is brought back into the United States. U.S. corporations are also provided foreign tax credits to offset the amount of taxes paid to other countries.
According to a 2008 Government Accountability Office Report, 83 of the Fortune 100 companies in the United States use offshore tax havens to lower their taxes. Today, U.S. corporations have an estimated $1.7 trillion of un-repatriated foreign profits sitting offshore.
The Corporate Tax Fairness Act would require US companies to pay taxes on all of their income by ending the deferral of foreign source income.
Under the legislation proposed by Sanders and Schakowsky, corporations would pay U.S. taxes on their offshore profits as they are earned. The legislation would take away the tax incentives for corporations to move jobs offshore or to shift profits offshore because the U.S. would tax their profits no matter where they are generated.
For a fact sheet on the bill, click here.
To read the bill, click here.
To read a report on corporate tax dodgers, click here.
Source: Sanders' office. 2.7.2013
Vermont's Sanders proposes 'Tax Fairness Act' to tax offshore profits
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