Business for Shared Prosperity

Report Estimates at least $37 billion lost Per Year to Tax Havens

Tele-Press Conference with Senator Carl Levin and Rep. Lloyd Doggett and Business Leaders and Owners, July 20, 2:30 ET

CONTACT:
Shonna Carter, (212) 260-5000, shonnac@riptideonline.com
Bob Keener, (617) 610-6766, bobkeener@businessforsharedprosperity.org

Washington, DC, July 20, 2010 -- A new report to be released today explores the impact on smaller U.S. businesses when U.S. multinational corporations avoid taxes through overseas tax havens. It also includes a new estimate of the total federal tax revenue that is lost due to use of overseas tax havens: at least $37 billion per year. Previous estimates combined corporate and individual tax sheltering and ranged from $43 billion to $123 billion per year.

The report release coincides with the launch of a petition drive by Business and Investors Against Tax Haven Abuse, to gather signatures from the business community to urge President Obama and Congress to enact legislation that puts an end to tax havens. The petition launches with 400 initial business signers.

The report, Unfair Advantage: The Business Case Against Overseas Tax Havens, shows how when global corporations use tax havens to reduce or eliminate their taxes. It creates an unlevel playing field by shifting the tax responsibilities onto the backs of domestic businesses and individual taxpayers. The report also describes how corporate tax havens support a climate of gaming the system and enable risky investment behavior of the type that led to the recent financial crisis and the worst recession since the Great Depression.

The report may be found online at: http://businessagainsttaxhavens.org/reports.

"As a small business person, I'm incensed that other companies in our country are able to game the system and force the rest of us to take up the slack," said Debra Ruh, Founder and CEO of TecAccess of Rockville, VA. "When they avoid their normal tax obligations, that puts more of a burden on responsible and sustainable businesses like mine."

"Small businesses are the lifeblood of local economies. We pay our fair share of taxes, shop locally, support our schools and actually generate most of the new jobs," said Frank Knapp, President and CEO of the South Carolina Small Business Chamber of Commerce. "So why do we have to subsidize the U.S. multinationals that use offshore tax havens to avoid paying taxes? We need to end tax havens and use that revenue to invest in growing our small businesses. That is how we create a healthy economy."

"With small businesses still suffering from the recession, $37 billion could pay for programs to help them get back on their feet," said Scott Klinger, a Co-author of the report and Policy Director for Wealth for the Common Good. "We can't afford to continue to let U.S. multinationals avoid their fair share of taxes with overseas tax havens."

The report lists nine policies that could help level the playing field between small, responsible businesses and global corporations including:
-Block all transfers of intellectual property designed to evade taxes;
-Ban phony offshore corporations that pretend to earn profits offshore when the primary management team remains in the U.S.;
-Repeal the 80/20 Rule that allows corporations to escape U.S. taxation if 80 percent of their business occurs overseas;
-Create disincentives and penalties for U.S. Government contractors using tax havens to avoid U.S. taxes.

WHAT: The tele-press conference with Sen. Carl Levin (D-MI), will also have a small business owner, Amy Domini of Domini Funds, and the President of a major regional Chamber of Commerce.

CALL IN NUMBER: 1-(760) 569-7676 Code: 818215
WHEN: Tuesday, July 20 at 2:30 PM ET

Business and Investors against Tax Haven Abuse supports policies to end tax avoidance and evasion through offshore tax havens. The petition is cosponsored by Business for Shared Prosperity, Wealth for the Common Good, American Sustainable Business Council and Growth & Justice.