Begich Co-Sponsors Bill to Put Up to $200 Billion Towards Deficit Reduction

Press Release

U.S. Sen. Mark Begich wants to close a host of offshore tax loopholes to make the federal tax code fairer for small businesses and families and raise as much as $200 billion as the foundation for a balanced deficit-reduction package.

"Small businesses are the backbone of our economy, but without a level playing field, large multinational corporations are given a leg up by circumventing the system and avoiding taxes," said Begich. "This common sense bill will go a long way to closing these unfair loopholes and restoring fairness, transparency and essential revenue to our economy."

Begich is co-sponsoring the Stop Tax Haven Abuse Act would provide about $220 billion in additional revenue over 10 years, according to estimates from the Joint Committee on Taxation, by ending a series of tax gimmicks uncovered in a decade of work by the Permanent Subcommittee on Investigations.

The bill would stop tax-avoidance schemes such as transferring valuable intellectual property and the income they generate to offshore subsidiaries and the practice of setting up offshore shell corporations -- often nothing more than a post office box -- to claim foreign status for tax purposes.

The bill would:

Crack down on the use of intellectual property transfers as tax-avoidance tools by taxing excess income earned from transferring intellectual property to offshore subsidiaries;
Give the Treasury Department new tools to fight against foreign governments and financial institutions that aid tax avoidance, including the ability to prohibit U.S. banks from doing business with foreign banks in jurisdictions that impede U.S. tax enforcement;
Require SEC-registered corporations to disclose employment, revenues and tax payments on a country-by-country basis;
Eliminate the tax incentive for companies to move jobs and operations offshore by limiting their ability to claim immediate tax deductions for expenses related to those offshore operations while deferring the U.S. tax on the income those operations generate;
Repeal rules, which allow multinationals to avoid U.S. taxes they would otherwise owe by making offshore subsidiaries disappear for tax purposes
Prevent multinationals from using short-term loans from their offshore subsidiaries to essentially repatriate income while avoiding taxes that should apply to repatriated money.

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