NC Budget and Tax Center

Closing tax loopholes would be a step closer towards corporations paying their fair share

The Stop Tax Haven Abuse Act (S. 1533) would raise about $220 billion over the next decade by closing tax loopholes that encourage U.S. corporations to move jobs, profits and operations offshore and allow them to not pay their fair share of taxes.  As my colleague has noted, these costly tax breaks are undermining our ability to invest in the foundations of economic opportunity – an educated workforce, research and development, and healthy families.  Across the board cuts, known as sequestration, are taking their toll in North Carolina and closing corporate tax loopholes is the best way to replace a second round of cuts.

Here is just one example of a company that would no longer be able to benefit from tax loopholes if the Stop Tax Haven Abuse Act is passed.

Brothers Charles and Sam Wyly — who have included among their holdings for almost 25 years the arts-and-crafts chain Michael’s — crafted several artful offshore schemes to avoid paying their fair share of taxes. They set up 58 trusts and corporations in well-known tax havens like the Isle of Man. Despite maintaining effective control over all investment decisions, the Wylys claimed for tax purposes that these were independent entities, according to a U.S. Senate PSI investigation.

The Stop Tax Haven Abuse Act would make such tax avoidance very difficult by strengthening existing laws against offshore tax avoidance, expanding disclosure requirements, increasing penalties, and better screening for the sources of cash repatriated to America from offshore entities.[i]


[i] Levin, Sections 102, 104, 202, 203 and 204.

5 Comments

  1. LayintheSmakDown

    October 1, 2013 at 5:56 pm

    At least you guys (TM) are getting off of the phony tax depreciation argument that had been the focus of the other spotlights. Good to see you branch into something of actual substance around here.

    Although it can be said that with the confiscatory tax rates the US charges in comparison with most other first world countries this is what the result will be.

  2. Frances Jenkins

    October 1, 2013 at 6:29 pm

    Removing the 501c3 from group such as Justice Center/Progressive Pulse is the place to start. These groups are the arm of the Democrat Party and should not be allows to be a nonprofit. Only one side is ever presented and their purpose is to restore the Democrat Party and the truth be damned.

  3. david esmay

    October 1, 2013 at 7:10 pm

    Removing the 501c3 would wipe out the Kochs and Karl Rove’s biggest swindle, Francis you’re full of it as always.

  4. Alan

    October 2, 2013 at 10:01 am

    Another crack-pot comment from Francis…

  5. Jayhawk

    October 2, 2013 at 11:30 am

    Businesses should strive for balance and attain mutual relationships with the communities that they exist within. While the employer provides jobs and money to employees they also thrive because of the work ethic and education of those employees. Another reason way that business benefit from their own community is because the demand and the amount of profit they can make depends upon the location and affects the availability of consumers.

    If lower taxes in another country were attractive enough the employer would move to those new countries. My point is that the “confiscatory” tax rate must not offset the perks of doing business here.

    I happen to think that if businesses thrive because of this country, they ought to have a responsibility to improve or at the very least pay back into this country by circulating their earnings within this system and impacting the economy that has allowed them the privilege to survive and thrive. Hiding money from ones own country can harm the business in the long term by drying the well that they drink from. Hoarding profits and allowing employee salaries to stagnate, has the result of impoverishing the very consumers who can sustain businesses in the future. A parasite that cannot find a symbiotic balance will kill its host.