Stop Tax Haven Abuse Act, 2013
Over the years, I have always marveled
at the nonchalance encountered in Luxembourg while bringing up five potential
threats to the Luxembourg financial center. (or other tax havens for that
matter). These are US initiated threats, that eventually will be adopted by
other countries, such as at the recent G20.
Those threats were and still are in
historic order:
- Anti Money laundering, terrorist financing.
- The Foreign Corrupt Practices Act
- FATCA
- The Stop Tax Haven Abuse Act
- An emerging concept of combating regulatory and judicial havens.
While 1-3
are enacted, 4 has seen a new version of an old one being deposited by Senator
Carl Levin, whose reputation of getting the financial systems in order doesn't
need any advertising anymore. The Senator has also an impressive group of exceptional investigators at hand. I have met some. They are at the origin of detecting
loop holes and recommending action.
"The
United States hemorrhages hundreds of billions of dollars in tax revenue each
year to a relatively small group of multinational companies. These large,
profitable companies are headquartered here, they do business here, and they
benefit from the safety and stability of living and working in the United
States. Yet they use an array of complex arrangements involving offshore tax
loopholes to avoid paying their taxes. The Senate Permanent Subcommittee on
Investigations, which I chair, has spent more than a decade examining these
loopholes and the damage they do.
That’s why
on Sept. 19 I introduced the Stop Tax Haven Abuse Act, a comprehensive effort
to end these loopholes and gimmicks and bring more fairness to the tax code.
This bill, cosponsored by Sens. Sheldon Whitehouse of Rhode Island, Mark Begich
of Alaska and Jeanne Shaheen of New Hampshire, would tackle an array of
offshore corporate tax abuses.
The
provisions of our bill would, according to official estimates, reduce the
deficit by about $220 billion. If we used that revenue as one part of a
balanced deficit reduction plan, we could avoid six years or more of
sequestration. And the public supports that plan: Last year, a poll showed that
75 percent of Americans support closing offshore tax loopholes to reduce the
deficit."
"According to a Wall Street Journal
article, over 20 percent of the corporations that made initial public offerings
or IPOs in the United States in 2010, were incorporated in Bermuda or the
Cayman Islands, but also described themselves to investors as based in another
country, such as the United States. The article also described how
Samsonite, a Denver-based company, reincorporated in Luxembourg before going
public. Too many of these tax-haven incorporations appear to have no
purpose other than having the advantage of operating in the United States while
avoiding U.S. taxation and undercutting U.S. competitors who pay their taxes."
