Calling Out ‘Backward Incentives’ of Trump Tax Law, 54 Groups Urge Congress to Support Effort to Stop Corporate Offshoring

(COMMON DREAMS) Jake Johnson, May 25, 2018 — In an effort to combat “one of the most egregious problems” created by President Donald Trump’s deeply unpopular $1.5 trillion tax law, a diverse array of 54 prominent advocacy groups sent a letter (pdf) on Thursday calling on members of Congress to back legislation that would eliminate the law’s “backward incentives” that—contrary to GOP promises—actually encourage corporations to ship jobs and profits overseas.

“The Trump-GOP tax law continues to encourage corporations to shift enormous profits offshore and outsource good-paying American jobs.”
—Frank Clemente, Americans for Tax Fairness

“The Tax Cuts and Jobs Act (TCJA) will allow companies to avoid taxes on $235 billion in profits each year going forward,” writes the coalition of groups, which includes Americans for Tax Fairness, Public Citizen, and Jobs With Justice. “This is revenue that should be funding critical public investments in healthcare, education, infrastructure, and other priorities.”

“Moreover, the law created new incentives for multinational corporations to move their real operations offshore,” the groups add. “The law guarantees that U.S. multinational corporations will pay at most one-half the domestic tax rate on their offshore earnings, with many companies paying little or nothing in taxes on these earnings.”

As a remedy for the perverse loopholes created by the GOP tax law, the groups are calling on Congress to support the No Tax Breaks for Outsourcing Act, legislation introduced by Rep. Lloyd Doggett (D-Texas) and Sen. Sheldon Whitehouse (D-R.I.) in February that would eliminate tax breaks for offshore investments and equalize the tax rates companies pay on profits at home and overseas.

“The No Tax Cuts for Outsourcing Act provides a comprehensive and much-needed reform of the international tax code,” said Alan Essig, executive director of the Institute on Taxation and Economic Policy (ITEP), one of the letter’s signatories. “It would go a long way to cleaning up the mess created by the Tax Cuts and Jobs Act and stop offshore tax avoidance in its tracks.”

via Calling Out ‘Backward Incentives’ of Trump Tax Law, 54 Groups Urge Congress to Support Effort to Stop Corporate Offshoring.