On February 8, Clean Yield participated in a press conference with Senator Bernie Sanders (I-VT) in support of the Corporate Tax Fairness Act, which could add an estimated $590 billion or more in revenue in the next decade by closing a loophole that allows Corporations to move profits offshore. The bill would close loopholes in the corporate tax code to disallow corporations from moving profits to offshore tax havens like the Cayman Islands. The legislation also would end tax breaks for companies that ship jobs and factories overseas. “Under current law,” says Senator Sanders’ office, “U.S. corporations are allowed to defer or delay U.S. income taxes on overseas profits until the 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.”
This is a cause we at Clean Yield can easily stand behind. At the press conference, I noted that this legislation hits our business on two levels. First, we compete against large nationwide investment firms that have found ways to dodge important taxes through creative accounting and offshore subsidiaries, putting us at a financial disadvantage that can be remedied only with appropriate tax reform. We believe that if a company wants to incorporate in this country, enjoy the advantages and lack of corruption our system provides, and sell to our consumers, then it should also pay its fair share of taxes.
More Important, as social investors, we and our clients believe that both individuals and corporations need to contribute to the tax base in order for the government to provide necessary services and make important investments in our future. According to a 2008 Government Accountability Office report, 83 of the Fortune 100 companies in the United States use offshore tax havens to lower their taxes. Today, U.S. corporations have an estimated $1.7 trillion of unrepatriated foreign profits sitting offshore. Investments in renewable energy, transportation infrastructure, education, and countless other programs start with government funding from taxes. Without transparent, responsible, and fair taxation, these multinational businesses are putting America’s local economies at a severe disadvantage, adding to the increase of the federal deficit, and stunting our chances of a sustainable future.
Senator Sanders spoke passionately in front of a large format photo of the building that supposedly houses more than 10,000 corporations for tax purposes. After a few jokes about whether that was actually the Senator’s own Vermont home, two other speakers from the AFL-CIO and Citizens for Tax Justice added important facts and arguments from their groups’ perspectives. My remarks and the whole press conference were well received. Several reports challenged Senator Sanders on the exact figures from his speech and the likelihood of this passing through Congress, given the current climate.
On the Senate floor later in the month, Senator Sanders, never one to mince words, accused the nation’s largest banks of skirting their taxes, by way of explaining his opposition to the Obama Administration’s nominee for Treasury Secretary, Jack Lew, who worked at Citi when the bank received a bailout. “When it comes to paying their taxes, oh, suddenly they love the Cayman Islands,” Sanders said of Wall Street banks, according to a transcript posted on his website. “So my suggestion is, the next time these crooks destroy their banks and they need to be bailed out, let them go to the government of the Cayman Islands to get their bailout.”
For more information:
Corporate Tax Fairness Act
Senator Sanders’ Press Release (February 7, 2013)
Senator Hurls Damning Accusations Against Big Banks