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Statement of U.S. PIRG Tax and Budget Advocate Dan Smith on Senate Finance Chairman Ron Wyden (D-OR)’s modified mark of the “tax extenders” bill. The committee will mark up this legislation at 10am this morning.
“After Chairman Wyden took the bold step of striking an egregious offshore tax loophole from his proposed tax extenders bill, it found its way back in with no public debate. The Controlled Foreign Corporation (CFC) Look Through Rule lets multinational giants avoid U.S. taxes by booking profits to shell companies in tax havens like the Cayman Islands. Nixing this loophole would have saved taxpayers over $2 billion over the course of the next two years.
“Corporations hardly take this prized loophole for granted and no doubt mounted a furious push to add it back in the bill. A new report released by Americans for Tax Fairness and Public Campaign found that there are 1,359 lobbyists who have lobbied on the tax extenders package that includes the CFC Look Through Rule.
“The Senate Finance Committee squandered a unique opportunity to stand with regular taxpayers who can’t marshal armies of lawyers and lobbyists to bend the tax code to their whim. Unfortunately, they caved to special interest pressure.
“When big multinationals use offshore loopholes to dodge taxes, average taxpayers and small business owners are the ones to foot the bill, coping with cuts to public programs, higher taxes, or a larger deficit.
“We’re encouraged that an amendment to strike this loophole has been filed by Senator Brown (D-OH), and we hope the committee will do right by taxpayers and strike it once again. Close scrutiny reveals that the CFC look through rule serves only one purpose: letting a handful of giant multinationals use sham subsidiaries in tax havens to shirk their tax responsibilities.
“If the Senate Finance Committee keeps this in the bill, it will cast an ominous shadow on what a future comprehensive tax reform would look like for average taxpayers and small business owners.”
Click here for a study revealing that 82 of the top 100 publicly traded companies use tax havens.
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