Sen. Bernie Sanders on Tuesday introduced a bill to stop profitable corporations from sheltering income overseas in the Cayman Islands and other tax havens to avoid paying U.S. taxes. The legislation also would end tax breaks for companies that ship jobs and factories overseas.
Sanders spoke at a Capitol news conference in front of a photo of the notorious Ugland House, the building in the Cayman Islands that is the registered address of more than 18,000 companies. The building has become the symbol of all that is wrong with offshore tax havens.
“At a time when we have a $18.2 trillion national debt and an unsustainable federal deficit; at a time when many of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high, it is past time for corporate America to pay their fair share in taxes so that we can create the millions of jobs this country needs,” Sanders said.
Eighty-three of the Fortune 100 companies in the United States have used offshore tax havens to lower their taxes, according to the most recent Government Accountability Office study.
Sanders’ bill and a companion measure introduced today in the House by Rep. Jan Schakowsky would yield more than $590 billion in revenue over the next decade, according to the Joint Committee on Taxation.
The ranking member of the Senate Budget Committee, Sanders announced the bill introduction during a news conference with groups releasing a report on how the tax shelter loophole has harmed many small businesses.
The bill also would remove tax code incentives for U.S. companies to ship American jobs and factories abroad – tax breaks which have contributed to the loss of millions of manufacturing jobs and the closure of some 60,000 American factories since 2000. “That has also got to change,” Sanders said.
Under current law, U.S. corporations are allowed to defer or delay U.S. income taxes on overseas profits until the money is brought back into the United States. U.S. corporations are also provided foreign tax credits to offset the amount of taxes paid to other countries. Under the legislation, corporations would pay U.S. taxes on their offshore profits as they are earned. The legislation would take away the tax incentives for corporations to move jobs offshore or to shift profits offshore because the U.S. would tax their profits no matter where they are generated.
Sanders was joined at the news conference by Bob McIntyre, executive director of Citizens for Tax Justice, Jamie Woo of Public Interest Research Group, and Bryan McGannon, policy director for the American Sustainable Business Council.