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Issue 1465 April 22, 2012
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TAX FAIRNESS: Corporate Inversions Targeted by Coalition of Citizen Groups

High Price of Tax Loopholes Subject of Special Report by Michigan Group

September 21, 2014       Leave a Comment
By: Dave Rogers

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One of the issues highlighted in this report is the effect corporate tax cuts has had on education in Michigan.
 

The heat is on!

At last!

You probably won't read this story anywhere else, and it will be a rare politician who talks about it, but a massive effort is being mounted to stop corporate tax dodges like that being attempted by Burger King.

Michigan Citizen Action, a citizen watchdog group has released a report titled, "The High Price of Tax Loopholes," which details the sacrifices that working Michiganders have made while large corporations reap the benefits of big tax breaks.

One of the issues highlighted in this report is the effect corporate tax cuts has had on education in Michigan. You can view the full report here: http://www.americansfortaxfairness.org/tax-tradeoffs/ A coalition of 56 national organizations has urged a stop to corporate tax inversions (i.e., moving offshore to avoid taxes).

In a letter to Sen. Harry Reid (D-NV) and Sen. Ron Wyden (D-OR), the coalition asserted it is urgent for Congress to "stop the hemorrhaging of precious tax dollars through this [corporate inversions] tax dodge."

Letter signers ranged from America's largest unions to leading advocacy, social justice, Netroots and religious justice groups.

The letter was coordinated by Americans for Tax Fairness, a coalition of 425 national and state organizations.

Excerpts from the letter follow: "Our top priority is for Congress to enact the Stop Corporate Inversions Act (S. 2360), sponsored by Sen. Carl Levin and 22 other senators. This measure would end the current practice of treating inverted corporations as foreign companies even when they have not left the United States in any real sense.

"We also urge action to stem 'earnings stripping' for inverted firms, whereby a U.S. company borrows money from its new foreign parent in order to reduce its taxable income here at home and shift its profits offshore. Senators Schumer and Durbin have proposed legislation that would partially address this tax dodge.

"We should no longer provide generous taxpayer-funded contracts and subsidies to corporations that abandon America."

Sen. Levin's No Federal Contracts for Corporate Deserters Act (S. 2704) would ban firms that change their corporate address to a tax haven from receiving government contracts.

Congress should also require that firms leaving here pay unpaid taxes on past profits held offshore. U.S. companies enjoy the privilege of deferring payment of their taxes on offshore earnings, which in effect grants them a no-interest loan from taxpayers that should be repaid if corporations re-incorporate elsewhere."

Also, 13 organizations announced that they have delivered 332,064 petitions to the White House urging the President to take action to restrict "corporate inversions." The petitions were gathered online by Americans for Tax Fairness, American Family Voices, Campaign for America's Future, CREDO Action, Daily Kos, Demand Progress/Watchdog.net, Democracy for America, National People's Action, The Other 98%, Progressive Congress, Progressives United, Roots Action and USAction.

The petition calls on the Obama administration to prevent corporations from renouncing their U.S. "citizenship" in order to avoid paying their fair share of taxes. It specifically asks the President to sign an executive order preventing big corporations from deserting America by claiming to be located offshore.

"Congressional action is stymied for the time being," said Frank Clemente, Executive Director of Americans for Tax Fairness. "The American people are urging President Obama to lead the way. We need him to issue a strong executive order that removes the financial incentives for companies to renounce America in order to dodge their taxes."

"President Obama has called companies that take advantage of tax inversions corporate deserters, but strong rhetoric won't stop corporations from dodging taxes," said Becky Bond, Vice President of CREDO. "President Obama should take action now and stop corporate deserters by executive order."

"Walgreens' and Burger King's attempts to flee U.S. taxes have outraged Americans," said Roger Hickey, co-director of the Campaign for America's Future. "It is time for the President to take action to stop corporations from moving their ownership to avoid U.S. taxes -- and if he does the public will back him up."

In late July, President Obama drew attention to the inversion issue by delivering a speech in which he called these companies "corporate deserters." The Treasury Department has been considering what actions it can take without the passage of new legislation. The White House is expected to make an announcement about its plans soon.



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Dave Rogers

Dave Rogers is a former editorial writer for the Bay City Times and a widely read,
respected journalist/writer in and around Bay City.
(Contact Dave Via Email at carraroe@aol.com)

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