Ups! Congress Considers Cracking Down on Corporate Profit Shifting and Tax Haven Abuse

Ups. remember those articles I shared with you about Corporate America's tax loopholes?  Well Congress is having "meetings"  concerning those very loopholes.  Things don't look for the continuation of Corporate tax loopholes.

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The House Ways and Means Committee held a hearing Thursday to examine corporate tax reform and the impact of offshore tax havens on base erosion and profit shifting by multinationals.

 

In convening the hearing, Ways and Means Chairman Dave Camp, R-Mich., noted that the U.S. has the highest statutory tax rate in the industrial world of up to 35 percent. He has heard comments about that fact ever since the committee issued a discussion draft of international tax reform proposals in October 2011 (see Congressional Republicans Propose International Tax Reforms).

“Nearly all have offered a universal observation—having the highest corporate rate in the developed world along with an outdated international tax system is a barrier to success that leaves our country falling further behind our foreign competitors,” he said in his opening statement. “Academics and economists agreed, and also cautioned, that any solution to these challenges must protect against erosion of the U.S. tax base through the shifting of profits to low-tax jurisdictions. Their concern is not without merit. Oftentimes, multinational businesses reduce their tax liability by separating the jurisdiction in which income is booked for tax purposes from the jurisdiction in which the economic activity occurs. The result of these practices is ‘erosion’ of the tax base in a jurisdiction where the activity takes place.”  read more