Sen. Bernie Sanders (I-Vt.) introduced legislation on Tuesday that would bar U.S. corporations from deferring their tax bill on offshore profits.
Sanders, the ranking member of the Senate Budget Committee, proposed ending deferral as part of a broader measure aimed at offshore tax havens that he says could raise around $590 billion over a decade. The bill would also target the offshore tax deals known as inversions, and other tax techniques used by large multinational corporations.
{mosads}At a news conference, Sanders mocked his GOP counterparts for saying they’re concerned about the U.S.’s $18.2 trillion national debt, but are unwilling to roll back any tax breaks used by the wealthy and corporations to help pay down the deficit.
Sanders said he was “sure, just sure” that the debt would force Republicans to say “‘my goodness’, what an opportunity to raise substantial sums of revenue so that we can reduce our national debt.’”
Rep. Jan Schakowsy (D-Ill.) has introduced a companion measure to Sanders’s bill in the House.
The measure targets inversions, the practice in which multinationals shift their legal address abroad and slash their tax bill in the process. It also goes after earnings stripping, in which U.S. subsidiaries take a tax deduction on interest payments after getting a loan from their foreign parent.
Sanders’s measure isn’t expected to gain much traction in either the House or the Senate. Republicans want to shield the vast majority of offshore corporate income from U.S. taxation, and instead shift to the sort of so-called territorial system employed by many other industrialized countries.
President Obama has proposed installing a 19 percent minimum tax on future offshore corporate earnings. The top corporate rate is currently 35 percent.
Sanders introduced his legislation at a news conference with liberal groups, who released a study asserting that small businesses would have to pay an average of more than $3,000 apiece to make up for corporate revenue lost to tax havens.