New legislation is hitting the floor in the nation's Capitol today that takes aim at corporations that have off-shore "tax shelters," as a way of keeping profits from being taxes. Its backers say it will generate more than $590 billion in tax revenue over the next decade.
U.S. Rep. Jan Schakowsky (D-Ill.) is introducing the Corporate Tax Fairness Act, which aims to control the country's deficit and eliminate tax loopholes which she says are subsidizing big oil companies and corporations that are shipping jobs and profits overseas. Schakowsky introduced the bill in the House while U.S. Sen. Bernie Sanders (I-VT) introduced it in the Senate.
Under current law, U.S. corporations are allowed to defer or delay U.S. income taxes on overseas profits until this money is brought back into the United States.
U.S. corporations are also provided foreign tax credits to offset the amount of taxes paid to other countries. Today, U.S. corporations have an estimated $1.7 trillion of un-repatriated foreign profits sitting offshore, according to the bill sponsors.
Schakowsky tells the Sun-Times that corporations are using this as a tax loophole to shelter their profits by simply having post office boxes overseas. For instance, she says in the Cayman Islands there is a five-story building "that is the so-called home of 18,000 businesses." The companies are taking advantage of a tax loophole by sheltering some of their revenues.
The building is filled with post office boxes, she said, which are there: "For the sole purpose of tax avoidance," Schakowsky said. "It is money that we should be collecting from these wealthy corporations."
Some of the companies targeted: General Electric, Exxon Mobile, Pfizer, Microsoft, as well as others.