Statement on the Introduction of the Corporate Tax Fairness Act
Washington, DC (February 15, 2013) – Rep. Jan Schakowsky released the following statement on the introducing the Corporate Tax Fairness Act:
This week, Rep. Jan Schakowsky introduced the Corporate Tax Fairness Act (H.R. 694) to end tax breaks for companies that ship jobs and profits overseas and eliminate loopholes that allow profitable corporations to shelter income in the Cayman Islands and other tax havens. The bill is estimated to yield more than $590 billion in revenue over the next decade, according to estimates by the Joint Committee on Taxation.
Sen. Bernie Sanders (I-Vt.) introduced in the companion measure (S. 250) in the Senate.
"Even as profits grow to record levels, corporations' share of tax revenues paid has dropped significantly in recent decades. Sen. Sanders and I are offering a comprehensive and commonsense solution that would eliminate tax subsidies for big oil companies and corporations that are shipping jobs and profits overseas," said Rep. Schakowsky. "The revenue raised by this bill will help us solve our fiscal challenges without hurting investments in job creation or cutting Social Security, Medicare, or Medicaid benefits."
"At a time when we have a $16.5 trillion national debt and an unsustainable federal deficit at a time when roughly one-quarter 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 contribute significantly to deficit reduction," said Sen. Sanders, a member of the Senate Budget Committee.
The Corporate Tax Fairness Act would make the following reforms:
• End the deferral of foreign source income that allows corporations to avoid paying taxes on overseas profits. 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. Today, U.S. corporations have an estimated $1.7 trillion of un-repatriated foreign profits sitting offshore. This would take away the tax incentive 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.
• Prevent corporations that are American for all practical purposes from avoiding U.S. taxes by claiming to be a foreign company through the establishment of a post office box in a tax haven country. According to a 2008 Government Accountability Office Report, 83 of the Fortune 100 companies in the United States use offshore tax havens to lower their taxes. More than 18,000 corporations – nearly half of them with a U.S. billing address – are registered in a single building in the Cayman Islands.
• Close loopholes that allow U.S. corporations to artificially inflate or accelerate foreign tax credits.
• Eliminate tax loopholes for big oil companies that allow firms to disguise royalty payments to foreign governments as foreign taxes.
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