WASHINGTON – (PAI) Prompted by the convergence of Income Tax Day and a report showing up to $1 trillion over 10 years in U.S. tax losses due to offshore corporate tax havens, several lawmakers are trying to ban the corporate tax dodge.
In legislation introduced in 2007 and reintroduced this year, Sen. Carl Levin, D-Mich., outlaws U.S. corporate use of foreign registration of “dummy” corporations to par U.S.-generated revenues and spending, thus escaping the tax man, the U.S. Public Interest Research Group reports.
A 2008 Government Accountability Office study showed that 25% of U.S. corporations with more than $250 million in assets or $50 million in sales paid no federal income taxes at all in 2005, the most recent year for which such data is available, US PIRG said in its report, Tax Shell Game.
“In this Congress, the Stop Tax Haven Abuse Act was again introduced, and its supporters urged President Obama to include language in his budget to address tax havens, which he did,” US PIRG said.
“Earlier this year, Treasury Secretary Geithner indicated to the Senate Finance Committee the president would continue this fight in his new role, by using the budget to address the use of offshore tax havens by U.S. corporations and would ‘propose a series of legislative and enforcement measures to reduce such U.S. tax evasion and avoidance,’” the report said. While a Democratic senator from Illinois, Obama was a lead co-sponsor of Levin’s anti-tax-haven legislation.
Some of the biggest U.S. corporations, including several that have taken federal bailout funds, are some of the biggest users of the tax havens to avoid paying the IRS, the group’s report says.
They include Citigroup, the Bank of America and Morgan Stanley, all of which registered dozens of tax havens in just one Caribbean tax haven alone, the Cayman Islands. All three financial firms have also taken billions of dollars in bank bailout funds.