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A bipartisan trio of US lawmakers have introduced legislation into the Senate that targets the $100 billion in revenues they claim is drained from the US Treasury every year by offshore tax haven and tax shelter abuses.
The 'Stop Tax Haven Abuse Act' is being backed by long-time offshore tax activists Sen. Carl Levin (D-Mich.) and Sen. Norm Coleman (R-Minn) the Chairman and senior Republican of the Permanent Subcommittee on Investigations. It is also being supported by Sen. Barack Obama, (D-Ill).
For more than four years, Levin and Coleman have led an in-depth Subcommittee investigation into offshore tax havens, abusive tax shelters, and the professionals who design, market, and implement these tax schemes. Citing experts, they have estimated that up to $70 billion in tax revenues is lost every year through individual offshore tax avoidance, and an additional $30 billion from corporate offshore tax planning initiatives. Abusive tax shelters add tens of billions of dollars more, they said.
“With a $345 billion annual tax gap and a $248 billion annual deficit,” said Levin, “we cannot tolerate a $100 billion drain on our Treasury each year from offshore tax abuses. We cannot tolerate tax cheats offloading their unpaid taxes onto the backs of honest taxpayers. Offshore tax havens have declared economic war on honest US taxpayers by helping tax cheats hide income and assets that should be taxed in the same way as other Americans. This bill provides a powerful set of new tools to clamp down on offshore tax and tax shelter abuses.”
“It is simply unacceptable that some individuals are using offshore tax havens and secrecy jurisdictions to shelter trillions of dollars in assets from taxation,” said Coleman. “These tax schemes cause a massive revenue shortfall and, sadly, it is the honest American taxpayer who must bear a disproportionate burden of investing in areas like education and healthcare. We are introducing this bill to close these loopholes, shut down offshore tax schemes, and ensure that every American pays their fair share of taxes.”
“This is a basic issue of fairness and integrity,” said Obama. “We need to crack down on individuals and businesses that abuse our tax laws so that those who work hard and play by the rules aren’t disadvantaged.”
The Stop Tax Haven Abuse Act is a strengthened version of a tax reform bill that Levin, Coleman, and Obama introduced in the last Congress. The legislation was strengthened as a result of a year-long Subcommittee investigation which resulted in a hearing and report on August 1, 2006, examining a series of case studies showing how US taxpayers are using offshore secrecy jurisdictions to avoid US taxes.
“None of these offshore schemes would work,” said Levin, “without the secrecy that prevents US agencies from enforcing our laws. Our bill offers innovative ways to combat offshore secrecy. We can’t let the offshore tax havens hide $100 billion in US tax revenues which are needed to protect our troops, fund health care and education, and meet the other needs of American families.”
Among other measures, the 68-page bill would:
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