As published on financialregnews.com, Monday 15 March, 2021.
Congressional Democrats recently introduced bicameral legislation to crack down on offshore tax loopholes and raise billions in revenue by improving tax enforcement and strengthening anti-money laundering laws, among other provisions.
The Stop Tax Haven Abuse Act, H.R. 1786/S. 725, was introduced on March 11 by U.S. Rep. Lloyd Doggett (D-TX), a member of the Ways and Means Committee, and U.S. Sen. Sheldon Whitehouse (D-RI), a member of the Finance Committee. The legislation seeks to end offshore corporate tax avoidance by addressing companies that make profits earned domestically but that appear on the books in tax havens in other countries.
“This legislation would shut down the complex shell games that allow corporations and the superrich to hide their profits in island tax havens, forcing working families and small businesses to make up the difference,” Doggett said. “Tax-dodging is not a victimless offense. These gaping corporate tax loopholes provide troubling incentives to invest abroad instead of at home, shipping jobs offshore and harming our communities at the same time that they deplete our ability to pay for our national security and other important public services.”
The lawmakers cited a study estimating each year America loses $90 billion in revenue to offshore tax dodging, noting closing loopholes would restore much-needed revenue, level the playing field for domestic businesses small and large and improve public confidence in the U.S. tax system.
“Hard-working American families don’t get offshore tax shelters to avoid paying taxes, so why let big multinational organizations and the ultra-rich have this dodge?” Whitehouse asked. “This bill would crack down on big corporate tax evaders and wealthy tax cheats, making the tax code fairer for those who don’t have special access.”
Among numerous provisions, the bill would require tax-avoiding companies with more than $100 million in gross receipts, as opposed to the current $500 million, be subject to the Base Erosion and Anti-Abuse Tax (BEAT), aligning it with other anti-avoidance measures in the tax code. In addition, the measure would eliminate tax breaks for foreign oil and gas companies, and also close loopholes that allow partnerships with foreign partners to transfer income offshore.