Washington, DC – The FACT (Financial Accountability and Corporate Transparency) Coalition today submitted comments to the Senate Finance Committee’s Business Income Tax and International Tax Working Groups calling for a number of substantive changes in the tax code to restore fairness and to close loopholes that allow U.S. multinational corporations to avoid taxes.
Launched in January by Chairman Orrin Hatch and Ranking Member Ron Wyden, the working groups are now seeking input from interested stakeholders on how best to overhaul the nation’s broken tax code.
Comment submitted by the FACT Coalition specifically highlighted a number of issues, including:
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•How the tax code is riddled with loopholes inserted by special interests resulting in the ability for large, multinational corporations to shift their tax responsibilities to small businesses, domestic businesses and average taxpayers.
•How companies use the current system of deferral to indefinitely put off paying taxes until the profits are “brought back” to the U.S.
•Two of the supposedly “temporary” tax breaks contained in the package of provisions referred to as the “extenders”: the “active financing exemption” and the “Controlled Foreign Corporation (CFC) Look-Through Rule,” which U.S. corporations use to further manipulate the system to avoid taxes.
•The practices of inversions and earnings stripping, where a domestic company purchases a foreign firm that’s usually much smaller and reincorporates overseas in a low or no tax jurisdiction. The company then loads down the domestic entity with so much debt as to obviate any potential tax payments.
“Under the current system multinationals are able to avoid taxes, leaving small businesses, individual taxpayers, and domestic corporations to foot the bill,” said Rebecca Wilkins, executive director of the FAT Coalition. “Both Chairman Hatch and Ranking Member Wyden have repeatedly stated that they want to restore fairness to the tax system. Well, this isn’t fair and now they have a chance to fix things.”
“People have had enough of a system where the biggest companies play by a different set of rules,” said Fair Share National Campaign Director Nathan Proctor. “The rest of us can’t hide our income in offshore tax havens, we pay our fair share. It’s time to level the playing field.”
“These loopholes may be legal, but they are still cheating the American public out of much needed revenue to fund important government services,” said Susan Harley, deputy director of Public Citizen’s Congress Watch division. “Now is the time for members of the U.S. Senate Finance committee to restore more fundamental fairness to our tax code by representing the needs of their constituents who are small businesses and average citizens instead of keeping big tax breaks on the books for huge multinational corporations.”
The FACT Coalition’s comments to the Senate Finance Committee can be found here.