Statement on Closing Offshore Tax Hideouts

Statement

Multinationals like GE are using offshore tax havens and accounting gimmicks to avoid paying any U.S. taxes at all. In 2010, GE paid no taxes even though it made $14.2 billion in profits. Just as multinationals like GE shirk their responsibility to the loyal employees that built the companies by sending jobs overseas, they shirk their responsibility to the nation where they grew up by gaming the tax system. We can't tolerate an annual drain of $100 billion on our treasury while hardworking Americans pay taxes and the pressing needs of our nation are ignored. We must shut down offshore tax havens and close tax loopholes that companies such as GE have exploited to avoid paying taxes.

Each year the U.S. treasury loses between $70 to $100 billion from offshore tax evasion in nations such as Bermuda, Cayman Islands, Liechtenstein, Singapore and Switzerland.

In 2008, investigators from the Government Accountability Office (GAO) found that a five-story building in the Cayman Islands (known as Ugland House) serves as the address for 18,748 "tenants" -- and that up to 9,000 of these "tenants" are American. "Hiding income offshore" is Number 5 on the "Dirty Dozen" list of 12 biggest tax evasion scams.

We need to:

* Reform the American Jobs Creation Act of 2004 which allowed firms like Ford Motor Co. to get huge tax breaks despite having cut 10,000 jobs and without requiring them to create jobs here in America.
* Impose tougher penalties on corporate insiders who hide offshore stock holdings by increasing the maximum fine to $1 million per violation of U.S. securities laws, and on tax shelter promoters by increasing the maximum fine to 150% of their ill-gotten gains.
* Stop issuing tax shelter patents and prohibit the U.S. Patent and Trademark Office from issuing patents for "inventions designed to minimize, avoid, defer, or otherwise affect liability for federal, state, local or foreign taxes."
* Require hedge funds and other financial service operators to know their offshore clients and establish anti-money laundering programs as other U.S. financial institutions are required to do.
* Give law enforcement authorities the tools to detect offshore tax evasion schemes by requiring those transferring funds offshore to report the amount and destination of the funds being transferred. This will produce a trail that authorities can trace for funds going offshore.
* Give law enforcement the time to uncover complicated offshore tax evasion scams by extending the statute of limitations from three years to six years for tax returns with certain types of international transactions.

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