Washington, D.C. --- Senator Carl Levin (D-MI) is this week looking to close the tax loophole that allows many large U.S. based companies to claim profits made overseas on their subsidiary balance sheets and avoid paying U.S. taxes. Islands nations like the Caymans and Bermuda are long known to be hospitable for such tax avoidance schemes, but Ireland too would feel the reach of a more robust investigation and regulation of corporate tax avoidance.
"Offshore tax abuses are not only undermining public confidence in our tax system, but increasing the tax burden on middle America," said Levin in a statement.
"People are sick and tired of tax dodgers using offshore trickery and abusive tax shelters to avoid paying their fair share. This bill offers powerful new tools to combat offshore and tax shelter abuses, raise revenues, and eliminate incentives to send U.S. profits and jobs offshore. Its provisions, which can help stop the $100 billion per year drain on the Treasury, will hopefully be part of any deficit reduction package this year, but should be passed in any event."
Levin's "Stop Tax Haven Abuse Act" is co-sponsored by Senators: Kent Conrad (D-ND,) Bill Nelson (D-FL,) Bernie Sanders (I-VT,) Jeanne Shaheen (D-NH,) and Sheldon Whitehouse (D-RI.) With President Barack Obama and the Republican leadership including Speaker John Boehner (R-OH) and Congressman Eric Cantor (R-VA) still battling over the raising the U.S. debt ceiling and how and where to institute historic budget cuts, Democrats in particular are looking for ways to raise tax revenue without raising taxes on American workers.
Since 2009, it's estimated that Google, for example, has cut its tax bill by almost $3.75 billion by shifting non-U.S. operations through overseas subsidiaries based in Ireland and Bermuda. Consequently, the rate of corporate tax paid by Google on non-U.S. earnings was less than 2.5 percent.
The Levin legislation does not single out Ireland or other countries by name, but the legislation, if passed, would have a significant impact on where and how U.S. corporate behemoths report their profits.
