Small Business Statement: Support Legislation to Stop Tax Haven Abuse

  • Posted on: 20 June 2011
  • By: admin

We, the undersigned business owners, executives and investors, call on the President and Congress to end tax dodging and support a level playing field for business by enacting strong legislation to stop tax haven abuses. Offshore tax havens reward tax evaders, rob public coffers of needed revenue and offload taxes to responsible businesses and households.

Everyone needs to pay their fair share to keep America moving forward. Tax dodging deprives our nation of revenue needed to maintain and modernize the infrastructure and services underpinning a strong economy. An estimated $37-60 billion or more in tax revenue is lost every year to tax havens. Our economic progress is undermined when companies are rewarded for financial manipulation rather than innovation and productive investment.

Responsible businesses and banks are hurt when other firms use tax havens to avoid paying their fair share of taxes.

There is no justification for tax avoidance and evasion through tax havens. Offshore tax havens provide cover for banks, hedge funds and corporations to shift taxable income from the United States for the sole purpose of escaping taxation. Tax haven secrecy allows wealthy Americans to hide assets, helps companies manipulate their finances, and fosters the casino economy.

Ending tax haven abuse shows we are serious about taxation that is transparent, fair and responsible. It is an important step in ending the irresponsible speculation and financial manipulation putting our whole economy at risk. We call on Congress and the President to strengthen our economy by enacting tough legislation to stop tax haven abuses.

Key provisions we support include:
• End the tax dodging that occurs when a business incorporates in a tax haven, pretending to be a foreign corporation for U.S. tax purposes while, in reality, being managed and controlled from the United States, and taking advantage of all the commercial, educational and other infrastructure financed by U.S. taxpayers.
• End financial gimmickry that allows hedge funds to engage in transactions designed for the sole purpose of avoiding taxes on dividends.
• Put the “economic substance doctrine,” eliminating tax benefits for transactions that have no real business purpose apart from avoiding taxes, in the Internal Revenue Code.
• Impose restrictions on foreign jurisdictions, financial institutions or international transactions that are of primary money laundering concern or that impede U.S. tax enforcement.
• Increase disclosure of offshore accounts and close foreign trust, equity swap and other loopholes used to avoid or evade taxes.