By William Rice, Policy Consultant, Americans for Tax Fairness
This year, the mindless, across-the-board budget cut known as the “sequester” has hobbled some of the best-known and most important federal services, such as Head Start, national parks, medical research, education assistance and transportation projects. Meanwhile, multinational corporations are hiding profits and shipping jobs offshore, using tax havens to avoid paying their fair share of taxes. Congress could almost completely restore all of this year’s budget cuts to non-defense programs if it closed the most gaping offshore corporate tax loopholes.
The federal government does a lot of great things: tracking hurricanes, building highways, supporting programs for toddlers, feeding the elderly, making sure our food is safe. But this year the sequester–just one of many cuts imposed recently–put the axe to scores of important services, without regard to how much they were needed or how good a job they were doing. Together with associated cuts to the Pentagon, these reductions will cost our economy hundreds of thousands of jobs this year, according to the Congressional Budget Office. 2013 Budget Cut: $26 billion. (p. 5, Step 4)
The Stop Tax Haven Abuse Act (S. 1533) would end some of the most blatant forms of offshore corporate tax dodging, and raise $220 billion over 10 years. U.S. corporations would stop getting tax subsidies for exporting jobs and operations offshore. They would not be able to use dummy corporations offshore to avoid paying U.S. taxes. And they would find it harder to avoid U.S. taxes by transferring property–such as patents and trademarks–to a subsidiary in a tax haven. Until Congress enacts the Stop Tax Haven Abuse Act, all of us will go on paying the price for offshore corporate tax dodging. Annual Tax Break: $22 billion.
Let’s close the book on domestic sequester cuts by closing overseas corporate tax loopholes.