Eliminate Tax Shelters

Problem

Tax havens have allowed Fortune 500 companies to avoid paying their fair share of taxes for the public services they use, since accounting loopholes incentivize corporations to keep profits offshore. When they do bring them home, they do so at lower rates, and corporations often funnel profits back to themselves instead of creating jobs, paying higher wages, and investing in our American economy. 

When companies don’t pay their taxes, they cost the United States over $240 billion annually in lost corporate tax revenue, which could otherwise fund much-needed public services.

Our Plan

We need to negotiate new international accounting conventions to claw back expatriated profits and to deter avoidance behaviors in the future. To achieve this goal, we will:

• Promote a change in accounting standards, so that corporations report economic activity where it occurs and is taxed where they do business, rather than in the jurisdictions where their accountants and lawyers know they can hide and shelter their profits. 

“arm’s length, separate entity” ⇒ “unitary tax with formulary apportionment” 

• Enforce our commitments to existing regulatory frameworks, such as FACTA, CRS, and the OECD’s BEPS Project, in order to close additional loopholes used to shelter income, improve international cooperation and transparency, and repatriate capital to appropriate jurisdictions.

• Impose targeted sanctions on offending foreign financial institutions (FFIs) and individuals that refuse or fail to play by the new, equitable rules that we will design and enforce.

This matters

We need to target the global tax evasion crisis. Building ambitious programs that tackle wealth inequality and deliver the social services Americans need and deserve will require equally ambitious methods to see them realized, such as negotiating new international accounting conventions and internationally harmonized tax regimes to fund them.