The Trump administration is reportedly considering gutting regulations designed to prevent corporations from shifting profits overseas to avoid U.S. taxes, a move Democratic lawmakers and progressives condemned as yet another effort by the White House to enrich large companies at the expense of workers.
“One of the Trump administration’s top priorities has been making it as easy as possible for the wealthiest Americans and corporations to cheat and avoid taxes,” Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, said in a statement. “Rules preventing the offshoring of corporate profits should be strengthened — not weakened.”
Bloomberg reported late Tuesday that the Treasury Department is taking aim at “regulations intended to prevent American firms from lowering their U.S. tax bills by shifting income to their offshore branches that they can loan to their domestic branches and deduct the interest off their Internal Revenue Service bills.”
Don’t miss a beat
Get the latest news and thought-provoking analysis from Truthout.
“The move could make it easier for companies to use accounting tactics to minimize their U.S. earnings and inflate their foreign profits, which are frequently taxed at rates lower than the current 21 percent domestic corporate levy,” Bloomberg noted. “The existing regulations were aimed at stopping U.S. companies from moving their headquarters to a lower-tax country, known as a corporate inversions.”
This is DANGEROUS. Corporations that take their operations abroad to evade taxation are minimizing wealth generation for workers here in the U.S.
— Tax March 🚌 (@taxmarch) October 8, 2019
The Treasury Department, headed by former Goldman Sachs banker Steve Mnuchin, is considering repealing the Obama-era rules completely and replacing them “with something more business-friendly,” according to Bloomberg.
“Another betrayal by President Trump — choosing corporations over American workers. Shameful,” tweeted Sen. Sherrod Brown (D-Ohio).
Former Texas Rep. Beto O’Rourke, a 2020 Democratic presidential candidate, said the possible rule change combined with White House efforts to gut the safety net “tells you all you need to know” about President Donald Trump’s priorities.
“The same administration that tried to cut food stamps to save money wants to make it easier for companies to avoid paying taxes by hiding their profits offshore,” tweeted O’Rourke.
Trump has condemned corporate offshoring of profits and jobs during speeches and rallies on the campaign trail, often singling out major companies by name. But, as Common Dreams reported, the $1.5 trillion tax cut legislation Trump signed into law in 2017 contained incentives for corporations to shift money overseas, prompting outrage from members of Congress and advocates for a progressive tax system.
Last year, Rep. Lloyd Doggett (D-Texas) and Sen. Sheldon Whitehouse (D-R.I.) introduced legislation that would close the loopholes in Trump’s tax law and equalize tax rates on corporate profits at home and abroad.
“President Trump promised the American people he’d end the march of jobs and profits overseas,” Whitehouse said in a statement. “Instead, he’s doled out massive new tax breaks that reward offshoring.”