Government shutdown? Check.
Budget crises and partisan gridlock? Check.
Most of America's biggest corporations avoiding their taxes, thereby contributing to all of the above? Also check.
American citizens continue to bear the brunt of many congressional decisions lately, or perhaps, lack thereof. Congress's inability to grapple with our budget crises ultimately led to a government shutdown and fight over the debt ceiling. Yet one common-sense solution is not difficult to find: stopping the abuse of offshore tax havens that costs us an estimated $150 billion in annual revenue.
By using accounting tricks and taking advantage of our inefficient and loophole-ridden tax code, many large U.S.-based multinational corporations make their profits appear to be generated in offshore subsidiaries, thereby avoiding paying U.S. taxes. These subsidiaries are often nothing more than P.O. boxes - and in the Cayman Islands, nearly 19,000 of them are registered to a single address.
Since when were vacation spots also hot spots for phony corporate headquarters?
Fortunately, Senator Carl Levin (MI), along with co-sponsors Sheldon Whitehouse (RI), Mark Begich (AK) and Jeanne Shaheen (NH), have introduced the Stop Tax Haven Abuse Act. This legislation would close the most deplorable loopholes and save taxpayers $220 billion over ten years, which is more than enough revenue to replace two years of the sequester. This bill not only combats offshore secrecy, but also strengthens corporate transparency and accountability.
U.S. PIRG, Americans for Tax Fairness, and the Financial Accountability and Corporate Transparency (FACT) Coalition sent a letter to Congress today calling on lawmakers to support this common sense bill. It was signed by 538 state and national organizations representing tens of millions of Americans, including small business, labor, faith-based, environmental, and tax justice groups.
When wealthy individuals and large corporations abuse offshore tax havens, Americans and small businesses are forced to shoulder the burden. Every dollar that corporations avoid in taxes is balanced by average citizens and responsible small businesses paying higher taxes and coping with cuts to public programs, not to mention a higher federal deficit. That just doesn't seem right.
The $150 billion we lose in tax havens a year would be enough to provide Pell grants to 10 million students for four years of college; it could also guarantee loans for half a million small businesses; or revamp America's aging transportation infrastructure by building 15 commuter rail lines, 50 light rail transit lines, and more than 800 bus rapid transit lines.
With Congress scrambling to agree on a budget and facing an uphill battle following the government shutdown, surely closing tax havens should be the first step. And even if America didn't face budget crises - real and manufactured - the Stop Tax Haven Abuse Act should be passed. It puts the public before special interests and levels the playing field for small businesses. It's about time that Congress support a bill that stands with the public, and not large corporations abusing our system to avoid taxes.
U.S. PIRG, the Federation of State Public Interest Research Groups, is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society.