A Democratic government official, Janet Mills, joined Maine’s largest business lobby to testify against a proposal that would fill loopholes that would allow companies to hide profits in offshore tax havens.
“A Tax Haven Abuse Prevention Bill,” tabled Thursday by MP Denise Tepler (D-Topsham) to the Legislature’s Tax Committee, would oblige multinationals with sales in Maine to claim profits in the US if they file their taxes in Maine instead of trying to hide profits in offshore tax havens.
“Taxes are a shared obligation for all businesses in Mainers and Maine. They are the price we pay to create a just society, ”said Tepler. “This current form of tax fraud puts the burden of supporting our schools, roads, bridges and state parks on those who pay their fair share. In fact, those who take advantage of this loophole are forcing others to pay more. “
The bill is backed by a coalition of progressive advocacy organizations, Mainers for Tax Fairness, who put up speakers to explain to committee members that ending the tax evasion system would create fairer tax legislation that could pay for longstanding unmet needs in health care, childcare , Education, housing, food security, local services and infrastructure.
“Children, adolescents and adults remain on waiting lists for intensive care and treatment because the state does not have the resources to shore up the system and reduce the growing waiting lists for treatment,” said Jennifer Christian of the Alliance for Addiction and Mental Health . “Meanwhile, companies are not paying their fair share into our state economy. The inequality of the system is rippling and affecting people the least. ”
“In the past year there have been a lot of shortcomings in our system. It is now clearer than ever that childcare, paid family and sick leave, and access to health care and public health systems are essential parts of our government infrastructure, ”said Destie Hohman Sprague of the Maine Women’s Lobby. “Fair and equitable tax legislation is also part of the state infrastructure and can help us make the investments we need for a sustainable recovery.”
The Maine Center for Economic Policy reported In 2020, Maine is losing up to $ 52 million a year to tax haven abuse. Nationally, Fortune 500 companies hide an estimated $ 2.6 trillion in offshore profits.
The bill would also allow the state to regularly update the list of known tax havens to ensure that the state can keep up with corporate tax avoidance efforts.
In testimony to the bill, both the Maine State Chamber of Commerce and a member of the Mills administration argued that keeping a list of known tax havens was blacklisting.
“The bill would create a blacklist of countries designated as tax havens – countries where businesses are believed to avoid paying taxes on earned income,” said Linda Caprara, the Chamber’s government relations specialist claimed this was “a threat to ours.” the international relations of the state. “
Daniel D’Alessandro, attorney for the Maine Revenue Service, also blacklisted the proposal. He went on to argue that many offshore tax avoidance schemes were addressed by former President Donald Trump and Republicans of Congress during their 2017 tax overhaul.
“Since the Federal Tax Cuts and Employment Act came into effect in 2017, states have turned away from the use of blacklists for tax havens, as proposed in favor of other approaches,” D’Alessandro said in a testimony against Tepler’s bill.
Government opposition comes despite the fact that the Maine Democrats have made ending tax havens a core part of their opposition to former Republican Governor Paul LePage. In 2014, the Democrats held a rally at the State House pressuring LePage to sign a bill to close loopholes in tax havens.
Several similar bills have been submitted to the legislature in recent years.
“This bill has been presented to this committee in each term of office for at least the past few years. Why does it keep coming back? It keeps coming back because it’s about tax justice, ”said Tepler. “Is it fair that some Maine companies with more resources than others can hide some of their profits offshore in other countries?”
The members of the tax committee will examine Tepler’s bill further before voting on it.
Photo: Senator Troy Jackson speaks during a 2014 press conference calling the then government. Paul LePage closes a loophole that enables tax havens. | Maine Democrats