The Senate today adopted an amendment offered by Sens. Carl Levin, D-Mich., Kent Conrad, D-N.D., and Sheldon Whitehouse, D-R.I., that will add powerful new tools to America's fight against offshore tax havens and help reduce the deficit.
The amendment, which the Senate adopted as part of the surface transportation bill now under consideration, will allow the Treasury Department to take a range of measures against foreign governments and financial institutions that significantly impede U.S. tax enforcement.
"I have fought against offshore tax havens for years, and I am glad the Senate has taken a strong step in the fight against foreign governments and offshore banks that help privileged individuals and corporations dodge taxes while the rest of Americans have to shoulder the extra tax burden," said Levin, who as chairman of the Senate Permanent Subcommittee on Investigations has conducted lengthy investigations of the damage done by offshore tax havens. "Enactment of our amendment would help make our tax system more fair and would help reduce the deficit."
"This legislation will grant the Treasury Department a new tool to stop offshore tax havens and financial institutions from gaming the system. More must be done to clamp down on these tax havens and other schemes solely designed to get around current tax laws. This amendment is common sense and could raise nearly $1 billion to help tackle the nation's deficits and debt," said Conrad, the chairman of the Senate Budget Committee.
"It's time to put an end to offshore tax abuses that allow tax cheats to profit at the expense of honest taxpayers," said Whitehouse. "I'm proud to support Senator Levin's amendment, which will give the U.S. Treasury greater powers to crack down on offshore tax abusers and the banks that aid them."
Under Section 311 of the Patriot Act, Treasury can take a range of measures against foreign governments or financial institutions that engage in money laundering. The senators' amendment gives Treasury the same tools to combat foreign governments or financial institutions that significantly impede U.S. tax enforcement. For example, Treasury could prohibit U.S. banks from accepting wire transfers or honoring credit cards from banks found to significantly hamper U.S. tax enforcement efforts.
The amendment's provisions had previously been included in the Cut Unjustified Loopholes Act, or CUT Loopholes Act, which Levin and Conrad introduced in February. According to the Joint Committee on Taxation, a similar, earlier version of the legislation would reduce the deficit by $900 million over 10 years by restoring revenue lost to offshore tax havens.
A vote on final passage of the surface transportation bill is expected next week.