For Immediate Release
Chairman Camp’s Tax Reform Would Create a Permanent Corporate ‘Tax Holiday’
Statement of U.S. PIRG Tax and Budget Associate Dan Smith on House Ways and Means Chairman David Camp’s proposal for a territorial tax system.
WASHINGTON - “We were disappointed to see the introduction of Chairman Camp’s tax reform proposal especially given the revelations regarding the growing number corporate tax avoidance schemes this past year. The plan would take today’s flawed tax system and make it even worse.
Too many large corporate actors from GE to Google to Goldman Sachs employ armies of tax lawyers to find ways to move U.S. earned profits to paper subsidiaries overseas. Existing loopholes already allow profits legitimately earned in, say, Kansas or Kentucky to show up on books in the Cayman Islands.
If the door allowing gimmicky corporate tax avoidance was ajar, this kicks it wide open. Chairman Camp’s proposal amounts to a never-ending corporate tax holiday.
Offshore tax havens, used by at least 83 of America’s top 100 publically traded companies, already cost taxpayers $100 billion a year in lost revenue. That breaks down to each average taxpayer putting up an extra $434 dollars, an earlier U.S. PIRG report found.
As we saw in 2004, the last time we tested the ‘bring back the money’ theory, the biggest impact was to encourage even more companies to move profits off-shore. Public benefits that were supposed to accrue to the public, never materialized. It didn’t work then and it won’t work to make the games and gimmick permanent.
Moving to a so-called ‘territorial tax system’ would amount to tax dodging made easy and increase the burden put on the average taxpayer in either higher taxes, fewer services or larger debt obligations for those of us who pay what we owe.
Instead of exacerbating our deficit by institutionalizing unwarranted loopholes, Congress should move to stop tax haven abuse so that corporations that take advantage of the benefits of this country pay what they owe.”
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.