$238 Billion for Infrastructure Should be Considered a Down Payment;
Corporations Need to do Much More to Pay Their Fair Share
WASHINGTON – Frank Clemente, executive director of Americans for Tax Fairness, issued the following statement today about President Obama’s proposal to address offshore tax avoidance by U.S. multinational corporations that will be detailed in the Fiscal Year 2016 budget. The plan has three primary elements:
“The $238 billion the president’s plan would raise from taxing offshore corporate profits to pay for infrastructure improvements is welcome news, but it is not nearly enough. It should be considered a down payment, as big corporations need to contribute much more than that to pay their fair share.
“Americans for Tax Fairness is disappointed that the president continues to propose revenue neutral corporate tax reform. Corporations need to be paying their fair share of taxes. That means corporate tax reform must raise significant revenue over the long term to pay for services and investments that benefit our families and communities. Revenue neutral reform that closes loopholes to pay for lower corporate tax rates is not what the public supports. Corporations have not contributed a dime towards deficit reduction. Yet, since 2010 the rest of us have suffered from cuts of $2.5 trillion over 10 years to services we rely on in order to reduce the deficit. It’s time corporations contributed their fair share.
“The 19 percent minimum tax on U.S. corporate offshore profits is a step in the right direction, but it is far too low. And whatever new revenue will be generated will be given right back to big corporations through lower tax rates under the president’s revenue neutral plan. Our tax system should not encourage corporations to shift jobs or profits offshore, and the American public agrees. That means offshore profits should not be taxed at a lower rate than domestic profits, which the president’s plan would do. Lower tax rates on offshore income create an incentive for multinational firms to move production offshore and to disguise domestic profits as offshore profits. This gives them an unfair edge over small businesses and domestic companies. Rather than a minimum tax on offshore income, the simplest remedy would be to repeal the loophole that allows corporations to indefinitely defer U.S. taxes on their offshore profits, known as deferral.
“We appreciate that the president stands firmly against a corporate tax holiday, also known as a repatriation tax holiday. As part of corporate tax reform, we support the president’s proposal for a ‘transition tax’ on the $2 trillion in U.S. corporate profits offshoreon which no U.S. taxes have been paid. But the president’s proposed 14 percent tax rate, which would raise $238 billion, is too low. It would reward some of the worst corporate tax dodgers, who have stashed billions in tax havens. Why should they have a tax rate that is less than half that paid by many Main Street businesses? For years everyone else has been picking up their tab because our tax system encourages big corporations to shift jobs and profits offshore. It’s time for that to end.”
Americans for Tax Fairness’s corporate tax reform principles can be found here.
Americans for Tax Fairness recently supported President Obama’s other new tax proposals contained in his FY 2016 budget that would require the wealthy to pay a fairer share of taxes and assess a fee on Wall Street banks in order to pay for new investments that benefit working families.
Americans for Tax Fairness is a diverse coalition of 425 national and state organizations that collectively represent tens of millions of members. The organization was formed on the belief that the country needs comprehensive, progressive tax reform that results in greater revenue to meet our growing needs. ATF is playing a central role in Washington and in the states on federal tax-reform issues.