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Public Statements

Motions to Instruct Conferees on H.R. 4348, Surface Transportation Extension Act of 2012, Part II

Floor Speech

By:
Date:
Location: Washington, DC

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Mr. DOGGETT. Mr. Speaker, I yield myself such time as I may consume.

This transportation conference bill is appropriately focused on the transportation systems, on improving them and sustaining them across our country. But there is one important provision of this measure, as approved by the United States Senate, that deals with transportation networks of a different type. Those are the secret networks that lead to the exporting of jobs and of revenues that ought to be used in the financing of the operations of the essential services and national defense of our country.

This motion is very narrow, very directed. Since that particular provision concerning ``stop tax haven abuse'' was not included in the House bill, it simply instructs the conferees to recede to the version approved by the Senate. This is an important provision. It is a provision that will authorize special measures against foreign governments and financial institutions. Here is the key language of the amendment as adopted by the Senate: ``that significantly impede U.S. tax enforcement.''

This provision will be just one more tool that is available for the Treasury to address what some have estimated is as much as $100 billion a year that is drained from the United States Treasury as a result of offshore tax abuses. These abuses not only undermine public confidence in our tax system from all the many law-abiding taxpayers, both business and individual taxpayers, but the effect of these abuses is that the deficit is raised and that more of the tax burden is shifted to individual taxpayers and to small businesses that don't have the fancy accountants and attorneys and financial institutions to aid them in hiding their revenues.

As we continue debating how best to deal with our debt and our deficits, I believe that a fundamental principle that should apply is that, before we ask individual taxpayers or business taxpayers to pay additional taxes, we ought to ensure, for those who have abused the system and have avoided paying their fair share of taxes, that we have the enforcement tools to see that they fulfill their responsibilities.

I always find it extremely difficult to explain to a mechanic in San Marcos or to a small restaurant owner in San Antonio why it is that they have to pay a greater proportion--a higher rate--on their taxes than some of these multinationals that manage to shift their revenues offshore because some bankers or accountants are able to use these tax haven banks to hide the accounts in some remote jurisdiction.

Over the years, I've fought against this kind of abuse. It took a decade, but finally, a couple of years ago, I was successful in getting the Economic Substance Doctrine included in other legislation and approved in order to strike down phony transactions that were for no purpose other than that of tax avoidance. I have other legislation that I've offered that deals with schemes that other corporations use to siphon off much-needed tax revenue and jobs out of the United States. It is a big problem that does not have any one legislative solution, but the measure before us that would be encouraged by this motion to instruct does provide one tool that would be very useful.

We know that some foreign banks have peddled a wide array of offshore tax shelters, offering to set up paper firms and accounts in places like Switzerland, Panama, and the British Virgin Islands. Indeed, in 2009, the United States sued Swiss Financial Services and the banking firm UBS to force the disclosure of the thousands of undeclared assets of Americans that were being held in secret accounts abroad.

Just to get an inkling of how big this problem is, Mr. Speaker and colleagues, I will note that at this one bank, at this one Swiss bank, it admitted to $18 billion in undeclared assets of American clients that could well be taxable. This has cost the United States Treasury billions of dollars over the years, and this was just one bank in one country. Although a settlement was eventually achieved, I don't think we got all of the tax revenues back that we ought to have gotten back. This is really just an indication of how rampant this problem is and how necessary a provision of this type pending in the conference really is.

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Mr. DOGGETT. Mr. Speaker, I yield myself 30 seconds.

A distraction? A billion dollar distraction. We get a billion dollars more transportation out of this measure available for all of the States, if we approve this section, which the Senate has adopted.

A distraction? Tell that to the cleaning crew that pays a higher rate of taxes when they clean the corporate board room than the corporation does because of these secret tax havens. I think this goes to the core of our responsibilities. And, yes, these powerful lobby groups that line up their limousines outside the Capitol here, they manage to block consideration in these committees, but this Motion brings this important matter directly to the floor for action.

With that, I yield 4 minutes to the gentlewoman from Wisconsin (Ms. Moore), who serves on the Financial Services Committee and understands how urgent it is to address this problem.

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Mr. DOGGETT. Mr. Speaker, I yield myself an additional 3 minutes.

Mr. Speaker, this is a truly amazing debate. The motion is a narrow one asking that the House simply join with Republicans and Democrats in the United States Senate to include within this transportation bill a provision that will yield about an additional billion dollars for the repair of bridges, for the construction of transportation systems around the country.

It will do so not by raising taxes or the tax rate on anyone, not even by closing one of the many outrageous loopholes that exist in our tax law that allow some to gain advantage because of the power of their lobbyists and their accountants to write special provisions into the law and then exploit those provisions. No, it doesn't do any of that. It simply gives a tool to our law enforcement to enforce existing laws and to say that you cannot violate the law. Here is a way for the Treasury Department to enforce the laws effectively.

As the gentlewoman from Wisconsin pointed out, there is an infrastructure in place upon which this amendment properly builds and which Senator Carl Levin, who is the author of this amendment to the Transportation bill, and who has been a national leader in fighting tax abuse, built on by drawing this provision from legislation that he and I have filed independent of this bill, the Stop Tax Haven Abuse Act.

Special law enforcement provisions are granted by the PATRIOT Act with respect to money-laundering concerns. If the Secretary of the Treasury finds that reasonable grounds exist for concluding that a foreign government or a financial institution is involved in money laundering, the Secretary may impose special measures. That's exactly what this provision would do now for those that are involved in substantial tax abuse.

This particular PATRIOT Act provision has been used sparingly by the Treasury. It has not been abused. It was used, for example, against the country of Burma. It has been used to stop financial firms for laundering funds through the United States financial system. Other times, the Treasury has pinpointed its measures against a single problem financial institution to stop laundered funds from entering the United States.

The Stop Tax Haven Abuse provision that is included in this transportation bill and, which is now under consideration by the conference would empower the Secretary of the Treasury to use the same types of tools it currently has to deal with those that significantly impede U.S. tax enforcement.

In addition to the existing measures available, it would also give the Treasury the authority to block U.S. banks from honoring credit or debit cards from foreign entities that are primarily money-laundering concerns or that significantly hamper U.S. tax enforcement. Because of these sanctions, the Treasury will have an added tool needed to end offshore tax abuses that allow tax cheats to profit at the expense of honest taxpayers.

The amendment would confer discretionary authority upon the Treasury. The Treasury does not have to use this authority; but it has a new tool, when needed, to address these abuses. These special measures offer the Treasury necessary flexibility in dealing with tax dodgers.

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Mr. DOGGETT. Mr. Speaker, I yield myself 10 seconds.

I would observe how extraordinary it is that there are those just like these secret accounts held in abusive places abroad, there are those in the wings of the Capitol that oppose this measure and don't want to end tax abuse, but they are unwilling to come to this floor and speak about it. One person who is willing to come to the floor to speak about it is the victorious Bill Pascrell of New Jersey. I am honored to have him join me. He has worked with me in the House Ways and Means Committee to speak against this type of abuse.

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Mr. DOGGETT. Mr. Speaker, throughout this debate there's only one thing that both sides agree upon, and that is that this transportation bill ought to move forward, and move forward expeditiously.

This transportation bill has not moved forward expeditiously because of obstruction here in the House. It should have become law long ago--months ago, perhaps years ago--so that we could deal with the infrastructure problems in this country and deal with the jobs that could be created by doing the hard work of building things that we need in order to strengthen our economy and improve job growth in the private sector. That's where the agreement begins and that's where the agreement ends, because the basic position of the gentleman in coming to oppose this motion is to present no argument, on the merits, as to why this provision that the Senate has already adopted, with Republican and Democratic Senate support combined, should not become law.

Let me tell you a little of the perspective I bring to this.

About 10 days ago, I went one business to another across San Antonio. I was at a tire shop. They put on wheels, tires, rims on cars and pickups. It's hot, dirty work. They struggle to make a living. They work long hours. They work odd hours. They're not air-conditioned. They've got to deal with local regulations, government at all levels, pay their taxes, meet their payroll, take care of their sick workers.

I was down the street from there at a tamale factory. A woman had a great idea and expanded it so that she's selling tamales all over America, and they're great. It was a good way to begin the day to eat some of her tamales.

Those folks are working hard to make a living and they're like some of the folks with Startup America, the small tech companies that I have represented in Austin, and now increasingly in San Antonio, that have an idea. One group I talked to, their office was at a local coffee shop until they were asked to leave. They sat there with their computers. They came up with an idea, and now they have multiple employees in a new startup.

Why is it that those kind of businesses, whether it's putting on tire rims on a pickup truck or a startup tech company, ought to have to pay a higher rate of taxes than some company that can afford to link up with a foreign bank and a big CPA firm and hide their revenues in a bank in Switzerland or in Panama or in the Cayman Islands?

It cries out that this Congress would correct that injustice. And the fact that that injustice is not being corrected by this Congress tells us so much about the broader problems that we have here in Washington. If you just watched the last hour of this debate, you should be aware of people that linger around this Capitol whispering in the corridors, hiding in the shadows, coming out only at campaign time, when now, under the campaign rules, they can pour unlimited amounts of secret corporate money into their favorite candidate, and they decide that we haven't had enough process on this issue.

Let me tell you, it took 10 years to get a small provision added through the Ways and Means Committee to simply say you can't go out and do a transaction simply for the purpose of dodging taxes; it has to have some actual ``economic substance.'' Ten years in which some avoided paying their fair share because of an unjustified loophole.

My little company down there in San Antonio that changes tires all day, they've probably never been to Switzerland, much less considered hiring a bank in Switzerland to help them hide their revenues that they worked so hard to earn and which some of these companies involved in these abusive transactions just consider to be rather routine.

You say, well, this is just academic; surely people can't get away with this stuff. Let me tell you what they're getting away with.

I pointed out already that with regard to one bank in Switzerland, UBS, they finally had to disclose $18 billion--that's billion with a B--$18 billion of assets of United States citizens sitting there in hidden accounts in that bank. There were some 50,000 such accounts that UBS had to disclose. Eventually, they had to pay over $700 million in fines. But they're not the only bank that is involved. Currently, the Treasury has under investigation 11 Swiss banks. There's one bank that is under Federal indictment.

This is not an academic problem. It's academic only to those who talk about process instead of solutions. We have a serious problem that undermines the confidence in our government and in our system of tax collection.

Why should somebody who's out there struggling at that tire rim company or that tech startup or just a working family that's out there trying to make ends meet with two people, some working overtime, some working the night shift in order to provide the food and fiber that their family needs to survive, why should they have to comply with our tax laws when you have these kind of companies that could afford the special treatment, that can afford the lobbyists to block measures like this engaged in abuse?

So today I would say to you that there is an opportunity for this House to make itself clear on this issue. Yes, we want to move a transportation bill. And while Republicans have told us we can have transportation without really paying for it, we have a measure adopted by the U.S. Senate on a bipartisan basis, that will provide us a billion dollars more of the transportation we need.

But we not only get that additional transportation, we have an opportunity today to make our position clear to all of the people of America:

Do you stand on the side of preventing abuse, do you stand on the side of equity and fairness to all American taxpayers, or do you want special treatment? Do you want the few, the privileged, to continue to enjoy the privilege of the connivance that goes on between some of these folks and their lobbyists and their accountants and their high-powered lawyers to get advantages that most Americans don't have or want?

As far as I'm concerned, almost no matter what the topic is on this floor of this House, that's the basic issue involved: whether there will be equity and fairness that gives Americans confidence in this system of government, in this democracy, or whether it again and again will be subverted--and in this case, with one Member coming to offer an objection to the motion, not because the matter doesn't have merit, but because it hadn't been studied enough. We have studied this problem to death. It cries out for an answer today, and this motion is a narrow way of answering it.

It won't solve all of the problems. There will still be ways that these special interests will find to dodge and avoid their fair share of taxes. But it will close one abuse. It will give our law enforcement authorities one more tool to deal with criminal tax evasion. I believe we ought to adopt this very narrow measure and write it into the laws of the United States. Send this bill that has been lingering for so long to the President to be signed, and include in it the fact that this Congress did at least one little thing to address the inequities, the special privileges and advantages that the few enjoy here in Washington. Say ``no'' to unjustified privileges, and ``yes'' to prompt action on this transportation bill, and include that $1 billion of additional transportation revenues.

I urge my colleagues to adopt this motion to instruct and to do it promptly today, and I yield back the balance of my time.

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