WASHINGTON, DC – Congressman Lloyd Doggett and Congresswoman Rosa DeLauro today introduced the Sequester Delay and Stop Tax Haven Abuse Act, a bill that would end sequestration and curb corporate use of offshore tax havens. The legislation also requires country-by-country reporting of corporate tax payments to both developed and developing nations. This reporting is critical to curb corporate tax avoidance, a systemic cause of poverty.
“Congressman Doggett and Congresswoman DeLauro have introduced legislation that will benefit millions of people,” said Eric LeCompte, Executive Director of Jubilee USA Network, a faith-based antipoverty organization. “When corporations don’t pay their taxes, it’s always the poorest people who are hurt the most.”
Many multinational corporations avoid paying taxes by hiding their corporate income in offshore tax havens, affecting countries in every corner of the globe. By avoiding tax payments, particularly to developing countries, these corporations deprive struggling nations of the resources they need to build infrastructure and address poverty.
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The Sequester Delay and Stop Tax Haven Abuse Act would curb the harmful practice of tax avoidance by requiring corporations to report their tax payments on a country-by-country basis. This type of reporting discourages companies from bribing governments and creates a transparent record of what, if any, taxes are being paid to governments.
More than half of all banking assets and one-third of multinational company investments are routed through tax havens. “It’s estimated that for every $10 a country receives in development aid, $15 exits the country as a result of corporate tax avoidance,” noted LeCompte.
The revenue that would be generated in the US from these corporate taxes is estimated to be approximately $220 billion over ten years. This money would be used to repeal the sequester for 2014 and 2015, and only partially implement it in 2016.
“It’s time to stop corporate tax avoidance by multinational corporations and end the austerity practices that continue to hurt the most vulnerable,” shared LeCompte.