Senator Carl Levin (D-Mi) and several representatives--Rosa DeLauro (D-Ct), Lloyd Doggett (D-Tx) and Sander Levin (D-Mi)-- have written Peter Orszag, Obama's OMB Director, asking the Obama Administration to include in the FY 2010 budget proposal measures from the Stop Tax Haven Abuse Act (HR 2136, S 681 in the last Congressional session). See Letter to Orszag, Feb. 20, 2009. They want to stop--or at least limit--the ability of large publicly traded corporations to use island tax shelters to avoid paying approximately $100 billion in US taxes. This issue has become even more salient in the context of the TARP funding which has been handed out to financial institutions, many of which have subsidiaries in tax haven or financial privacy jurisdictions. See the earlier ataxingmatter posting on the GAO report on the use of tax havens by US multinationals and federal contractors, here.
The letter notes the group's "deep concern with the continued practice by most of the United States' largest publicly traded companies--including many federal contractors and recipients of financial bailout funds--of using offshore tax havens or financial privacy jurisdictions to avoid paying U.S. taxes" and urges the Obama Administration "to consider proposals for shutting down offshore tax abuses" in crafting the 2010 budget. Citing the GAO report's conclusion that "83 of the 100 largest publicly traded U.S. corporations, based on 2007 revenue, reported having subsidiaries in tax havens or financial privacy jursidctions," the letter noted that 4 of those 83 had more than 100 apiece, with one having as many as 427 such subsidiaries.
The group found the receipt of TARP funds by these offshore tax avoiders particularly galling.
Even more outrageous is the fact that a number of these firms are receiving funding through the Treasury Department's Troubled Asset Relief Program (TARP). ...Morgan Stanley has 158 subsidiaries in the Cayman Islands, while Citigroup has 90 and Bank of America has 59. [The three banks have received a total of $100 billion in the TARP funds.]...[T]he fact that hard working American taxpayers who play by the rules are providing funds to companies using tax haven subsidiaries that may help them dodge payment of their fair share of taxes is simply unacceptable.
Right on, Senator Levin and friends. It's high time that Congress got serious about preventing multinationals from using tax haven jurisdictions to avoid taxes that rightfully should be paid on their income.
Recent Comments