http://www.nytimes.com/roomfordebate/2013/04/11/global-tax-dodge-or-economic-boon/powerful-opposition-to-simple-offshore-reforms Powerful Opposition to Simple Reforms [image: Jack A. Blum]
Jack A. Blum, special counsel to the Senate Foreign Relations Committee for 14 years, is a lawyer and chairman of Tax Justice Network USA<http://tjn-usa.org/>. *Updated* April 12, 2013, 8:45 AM The disclosure <http://www.icij.org/offshore/secret-files-expose-offshores-global-impact>of reams of secret offshore data by the International Consortium of Investigative Journalists makes it plain that the world of offshore banking allows the rich and powerful to evade the rules the rest of us must live by. And the rest of us have to pay for it. Changes in federal law would allow reporting and accounting of profits to be transparent and make the rich pay their share of taxes. Because of the secrecy of offshore financial institutions and the lack of information about offshore transactions, the regulation of international banks and securities dealers has become virtually impossible. Offshore arrangements have helped Google, Apple, General Electric and others pay little or no<http://www.huffingtonpost.com/rep-bernie-sanders/end-tax-breaks-for-profit_b_841173.html>federal income tax. And the consortium’s data show how criminals use offshore vehicles to perpetrate frauds and then hide their gains. The government tolerates this because the beneficiaries spend millions lobbying against simple reforms. Major corporations want a “territorial” tax system<http://www.ctj.org/taxjusticedigest/archive/2013/03/goal_of_new_corporate_lobbying.php#.UT1RaTf85wE>that would leave profits sent to tax havens permanently free of taxation. The American Bar Association has twice testified against a bill <http://www.levin.senate.gov/issues/shell-corporations> by Senator Carl Levin that would require all states to keep records of the real owners of corporations, rather than just the title holders. This would end the use of Delaware and other U.S. states as corporate secrecy jurisdictions, but more than 70 countries allow themselves to be used as a shelter from the rules of others, in one form or other. Offshoring can be stopped by: • Requiring firms to report their profits on a country by country basis to the Securities and Exchange Commission and the Internal Revenue Service. This would expose the shifting of profits to tax havens where no business is done. • Creating a legal presumption<http://www.levin.senate.gov/newsroom/press/release/summary-of-the-stop-tax-haven-abuse-act-of-2011/?section=alltypes>that if a person deals with an offshore entity, they are an owner, removing the burden from the Internal Revenue Service to prove it. • Requiring that all accounts at U.S. financial institutions identify who controls them, not just the identity of shell directors. Under current law a corporation from a foreign tax haven can be recognized as an account’s owner, and avoid taxes as a “foreign investor.” • Ending deferral<http://www.bloomberg.com/news/2010-12-29/dodging-repatriation-tax-lets-u-s-companies-bring-home-cash.html>of taxation on foreign corporate profits. Presently corporations are allowed to defer U.S. tax on foreign earnings until they repatriate the money. The corporations use this provision to shift profits to a tax haven and then find ways to borrow it back free of tax. • Refusing to allow banks and brokerage firms to set up “branches” and subsidiaries in places where they do no real local business. Offshore loopholes have helped allow the percentage of U.S. tax revenue from corporations to sink <http://nationalpriorities.org/budget-basics/federal-budget-101/revenues/>to the lowest level in 55 years even as their profits have soared. Instead of cuts in “entitlements’’ like Social Security and Medicare we should focus on the tax avoidance “entitlements.” Until these large firms pay tax on foreign earnings the deficit problem cannot be solved. *Join Room for Debate on Facebook <http://www.facebook.com/RoomforDebate>and follow updates on twitter.com/roomfordebate. * Topics: taxation <http://www.nytimes.com/roomfordebate/topics/taxation>, taxes <http://www.nytimes.com/roomfordebate/topics/taxes> -- You received this message because you are subscribed to the Google Groups "Epistemology" group. To unsubscribe from this group and stop receiving emails from it, send an email to epistemology+unsubscr...@googlegroups.com. To post to this group, send email to epistemology@googlegroups.com. Visit this group at http://groups.google.com/group/epistemology?hl=en. For more options, visit https://groups.google.com/groups/opt_out.
