Democratic Congressman Lloyd Doggett, a member of the Ways and Means Committee, and Senator Sheldon Whitehouse enacted the Anti-Abuse of Tax Haven Act to close what they claim to be “vast offshore tax loopholes” that leave businesses with armies of lawyers enabling people to avoid taxes by making profits earned here in America magically appear on the books in tax havens like the Cayman Islands. “
In a statement announcing the bill, they said the new legislation would also tackle the type of illegal tax evasion exposed through the leaks of the Panama Papers and Paradise Papers.
“This legislation would end the complex shell games that allow corporations and super riches to hide their profits in island tax havens, forcing working families and small businesses to make up the difference,” Doggett said. “Tax evasion is not a victimless crime. These gaping tax loopholes provide worrying incentives to invest overseas rather than domestically, to move jobs overseas and harm our communities, all while impairing our ability to pay for our national security and other vital public services, ”he added.
Lawmakers cited an estimate by the Tax Justice Network that America is losing $ 90 billion in revenue “through offshore tax evasion.”
Various versions of a Tax Haven Abuse Act have been introduced since 2007.
The proposed law aims to improve tax enforcement. Strengthen anti-money laundering laws; Introduction of country-by-country reporting on corporate profits, taxes and investments; and improve offshore account disclosure.
It would change the property tax on erosion and abuse (BEAT) by subjecting companies with gross income of $ 100 million instead of $ 500 million to the tax. Bridge a loophole that allowed royalties to escape tax and remove a 3% exemption threshold, lawmakers said.
The bill would also expand existing restrictions on companies moving intellectual property offshore to partnerships and removing tax breaks for the oil and gas industry.
“Hardworking American families are not given offshore tax havens to avoid paying taxes. Why would large multinational organizations and the ultra-rich have this evasive maneuver?” said Senator Whitehouse, who is a member of the finance committee.
“This bill would target major tax evaders and wealthy tax evaders and make tax laws fairer for those who do not have special access.”
The bill has been referred to the Ways and Means Committee and the Committee on Financial Services.
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