Plug The Trillion Dollar Hole in U.S. Treasury: Small Business Leaders Say Offshore Tax Havens Draining Revenues, Investment, Jobs

Contact: Bob Keener, 617-610-6766
bobkeener@businessforsharedprosperity.org

Washington DC, July 13, 2011 – Small Business leaders applaud new legislation to stop tax haven abuse by U.S. multinationals that will cost at least a trillion dollars in lost tax revenue over the next decade. “Small businesses are the lifeblood of local economies. We pay our fair share of taxes and generate most of the new jobs,” said Frank Knapp, President and CEO of The South Carolina Small Business Chamber of Commerce. “While our members are in South Carolina, small businesses across this country, from California to Washington DC, understand that while they are paying their taxes, many U.S.-based multinational corporations are not. That’s not fair and it makes us angry. Why should we be subsidizing U.S. multinationals that use offshore tax havens to avoid paying taxes?”

“It’s obscene to put everything from the Small Business Administration to Medicare and Social Security on the chopping block while corporate tax dodging deprives us of major revenue. The Stop Tax Haven Abuse Act will help close the barn door on U.S. corporations moving their profits to offshore tax havens to avoid U.S. taxes,” said Scott Klinger, Tax Policy Director of Business for Shared Prosperity. “Increasingly, U.S. multinationals want to benefit from government spending on research, education, defense, infrastructure and much more without paying for it. Today, large corporations as a group contribute just 9 percent toward federal government bills – down from 32 percent in 1952. It’s time to plug the trillion dollar hole in the U.S. Treasury from tax haven abuse.”

The Stop Tax Haven Abuse Act, just introduced by Sen. Carl Levin, Chair of the Senate Permanent Subcommittee on Investigations, and Senate Budget Committee Chair Kent Conrad, is designed to stop the use of tax haven trickery and abusive tax shelters that rob the U.S. Treasury of at least $100 billion a year and incentivize U.S. corporations to move profits and jobs overseas. For example, it would close loopholes used by corporations and hedge funds to avoid U.S. taxes by setting up shell companies in the Cayman Islands, Bermuda and other tax havens.

“Imagine if I took my U.S. college degrees and CPA license off my wall, stuck them in a safe deposit box for a shell corporation I created in Bermuda, and told my Oregon clients to send their payments there,” said Brian Setzler, President of TriLibrium an accounting and business advisory firm in Portland, Ore. “Imagine this little accounting trick allowed me to avoid paying U.S. taxes until I brought those ‘foreign’ funds back to the United States – or maybe I’d just go retire in Bermuda. This is just the kind of absurd accounting acrobatics U.S. multinational corporations use to avoid paying billions of dollars annually in U.S. corporate income taxes.”

“Aggressive tax avoidance raises the question of what kind of country we want to have and who is going to pay for it,” said entrepreneur Paul Egerman, founder of the medical information technology company eScription and a member of Business for Shared Prosperity. “It’s outrageous that a U.S. multinational company is able to report profits to their shareholders and losses to Uncle Sam. When Cisco, Google or Pfizer deploy armies of accountants to game their taxes down, it means the rest of us are left responsible for the bill. This is about fairness in capitalism. Paying our fair share of business taxes is the price we pay to live in a civilized society and conduct business in a regulated marketplace with property rights protections, public infrastructure and the rule of law.”

Business for Shared Prosperity leads the Business and Investors Against Tax Haven Abuse campaign of business organizations and owners calling “on the President and Congress to end tax dodging and support a level playing field for business by enacting strong legislation to stop tax haven abuses. Offshore tax havens reward tax evaders, rob public coffers of needed revenue and offload taxes to responsible businesses and households. Everyone needs to pay their fair share to keep America moving forward.”

To arrange interviews with business people opposed to tax haven abuse, contact Bob Keener at 617-610-6766 or bobkeener@businessforsharedprosperity.org.

Business for Shared Prosperity is a network of forward-thinking business owners, executives and investors.

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