Providence, RI – With President Obama and Republican leaders in Congress citing tax reform as a key area for bipartisan cooperation in the new year, U.S. Senator Sheldon Whitehouse (D-RI) today announced that he will introduce three bills to make the federal tax system fairer for middle-class families and small businesses. The package would end tax breaks and loopholes that benefit multi-national corporations and the highest earners, and is projected to generate over $300 billion in revenue over 10 years.
“Our tax code is riddled with giveaways and special deals for the biggest corporations and top earners, and that special treatment hurts hardworking Rhode Islanders,” said Whitehouse. “Multi-national corporations stash assets and profits abroad to avoid paying a fair share in taxes. Companies ship jobs overseas and get a tax break for doing it. And billionaires pay lower tax rates than their secretaries. These bills would help end this kind of special treatment for special interests, and generate hundreds of billions of dollars in revenue in the process.”
All three bills will be introduced tomorrow when the Senate is in session. Senator Whitehouse will fight to include these proposals in any tax reform package that moves through the Senate.
Whitehouse’s plan includes:
The Paying a Fair Share Act – The Paying a Fair Share Act would implement the “Buffett Rule,” ensuring that multi-million-dollar earners pay at least a 30 percent effective federal tax rate. The rule is named for legendary investor Warren Buffett, who has famously pointed out that he pays a lower tax rate than his secretary. The bill, which includes language to preserve the incentive for charitable giving, would generate an estimated $71 billion over ten years.
The Offshoring Prevention Act – Currently, U.S. companies that manufacture goods abroad for sale here at home are allowed to defer payment of federal income tax – waiting to pay taxes on foreign income in years that minimize their tax liability. The Offshoring Prevention Act would require companies that send factories and jobs overseas to play by the same rules as ones supporting jobs in the U.S. The bill would generate an estimated $20 billion in revenue over ten years.
The Stop Tax Haven Abuse Act – Estimates show that Fortune 500 companies hold roughly $2 trillion in offshore holdings to benefit from favorable foreign tax systems and bank secrecy. Championed in previous Congresses by retired Senator Carl Levin (D-MI), the Stop Tax Haven Abuse Act would close loopholes that allow multi-national corporations to avoid paying a fair share in taxes by moving assets and profits through intricate networks of offshore subsidiaries and bank accounts. This bill would generate at least $220 billion in revenue over ten years.
None of the bills prescribe uses for the revenue they would generate. It would be up to Congress to decide how the funds would be spent – anything from investments in infrastructure to deficit reduction.
Whitehouse has been a leader in the Senate on tax fairness issues. In addition to authoring the Buffett Rule and Offshoring Prevention legislation in previous Congresses, in 2013, he proposed a plan to replace strict austerity measures contained in the 2011 debt ceiling deal – the budget “sequester” – by closing tax loopholes that benefit the wealthiest Americans and big corporations, and he has spoken often of the injustices in our present tax code.
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