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Senate International Tax Working Group Outlines Framework, Fails to Solve Problems but Doles Out Special Interest Favors
Washington, D.C. – Below is a statement by U.S. PIRG Tax and Budget Advocate Jaimie Woo on an outline presented by U.S. Sens. Chuck Schumer (D-NY) and Rob Portman (R-OH) illustrating their principles for international tax reform.
“This week, Senate lawmakers caved to special interests and neglected the general public. By offering an international tax reform framework that fails to close tax loopholes, Sens. Schumer and Portman supported a tax system that would accelerate tax avoidance to the worst degree.
“Rather than prioritizing closing corporate tax loopholes and ending incentives for companies that register their headquarters overseas, the International Tax Reform Working Group chose to move to a territorial-like system, which would exempt most corporate profits from U.S. tax if a company claims they were booked overseas. This would reward the country’s most successful tax dodgers, and further incentivize U.S. multinational corporations to shift profits overseas to avoid tax.
“The report also fails to strip our tax code of egregious tax loopholes, such as the CFC Look-Through Rule and the Active Financing Exception. These two tax breaks would cost nearly $80 billion if made permanent over the next ten years.
“Our loophole-ridden corporate tax code currently creates winners and losers. The winners are a set of large multinationals that boast armies of tax lawyers and accountants to dodge their taxes, even while they benefit from America’s infrastructure, education system, security and large consumer market. The losers are average taxpayers and small business owners who are left to foot the bill.
“Considering the fact that the U.S. loses approximately $150 billion every year from offshore tax loopholes, our lawmakers need to reject proposals that would exacerbate tax avoidance abuse, including this one.”
U.S. PIRG submitted recommendations for reform to the Senate Finance Committee during its open comment period. You can read the comments here.
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