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senate Bill S. 922

Closing Overseas Tax Loopholes to Make Businesses Pay More Income Taxes

Argument in favor

U.S. corporations need to pay their fair share of taxes to support the infrastructure and services that help facilitate commerce. Deficits are large, and the government needs all the money it can get.

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03/09/2016
"Today, we lose over $100 billion a year in revenue because large corporations stash their cash in offshore tax havens around the world. That is unacceptable." [berniesanders.com]
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BarackObama's Opinion
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03/09/2016
“These companies are cherry-picking the rules, and it damages the country’s finances... It adds to the deficit. It sticks you with the tab to make up for what they are stashing offshore.” [nytimes.com]
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Steven's Opinion
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01/16/2016
Way past due! Businesses establish themselves here in the US and conduct the majority of their business here. Incorporating overseas in order to avoid paying taxes and thereby avoid giving back to the system that helped make them rich is absolutely criminal!
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Argument opposed

Rather than punishing businesses for behaving rationally, why not reform corporate income taxes — and reduce tax rates? If U.S. tax rates were lower, corporations wouldn't try to avoid them.

LibertyForAll's Opinion
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02/11/2016
A one page tax code, with a flat tax of 14.5% on individuals, businesses and corporations (with no loopholes) is a vastly more pragmatic advancement to "give onto Cesar". Only a fool looks at the reaction of these corporations; a wiseman looks at what their reacting too. Witch is a daunting, 70,000 page tax code.
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BTSundra's Opinion
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01/19/2016
Instead of again, adding pages to our already-extensive tax code, let's make big tax cuts and drop to a flat tax system. Also, to make them come back to the U.S., we should lessen taxes, not raise them. That's not an incentive at all.
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operaman's Opinion
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01/16/2016
Corporations have paid there taxes. It's only Government who wants to double tax US corporations on overseas earnings. If US Corporations have followed the IRS taxation laws and have paid overseas taxes, case closed. Just wait, the IRS may be coming for your bank account.
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bill Progress


  • Not enacted
    The President has not signed this bill
  • The house has not voted
  • The senate has not voted
      senate Committees
      Committee on Finance
    IntroducedApril 14th, 2015

What is Senate Bill S. 922?

This bill would amend the tax code to eliminate used by businesses to minimize their corporate income tax burden.

Under this bill, American businesses could no longer defer or delay paying U.S. income taxes on overseas profits until the money is brought back into the country. This is generally done by taxing the profits when they are earned, regardless of where they are earned.

Tax credits given to U.S. corporations to offset the taxes they pay to other countries would be maintained as they are under current law. When a foreign government’s corporate tax rate is lower than the U.S. tax rate, companies would be obligated to pay the difference between the two rates. If a foreign government’s corporate tax rate is higher than the U.S. tax rate, the business wouldn’t have to pay U.S. corporate income taxes. These offsets would only be available for income earned in the foreign country.

Companies would be prohibited from avoiding U.S. taxes by establishing a superficial presence in a foreign country (like setting up a post office box) in order to claim status as a foreign business. Businesses that have their management and operations primarily located in the U.S. could not claim to be a foreign company.

Oil companies would not be allowed to classify royalty payments to foreign governments as foreign income taxes, which is a strategy those companies have used to minimize their U.S. tax burden.

Impact

Corporations that have a presence in the U.S. and foreign countries, their employees and customers, the Treasury Department, foreign governments, and the IRS.

Cost of Senate Bill S. 922

A CBO cost estimate is unavailable.

More Information

Of Note: According to a 2014 analysis by the Tax Foundation, the U.S. has the third highest corporate income tax rate out of 163 countries surveyed — coming in at 39.1 percent, behind only the United Arab Emirates and Chad. Japan and France were the only other members of the G7 nations to fall into the 20 highest corporate income tax rates.

An example of the complexity of corporate income taxation, General Electric filed a 57,000 page federal tax return in 2011 but ended up with a negligible corporate income tax burden on its $14 billion in profits. The $5 billion in U.S. earnings was sheltered through deductions and tax credits it obtained by writing off losses from the financial crisis, and investing in things like low-income housing or green energy, while the remaining $9 billion was outside of U.S. jurisdiction.

In-Depth: Sponsoring Sen. Bernie Sanders (I-VT) believes
“It is past time for corporate America to pay their fair share in taxes so that we can create the millions of jobs this country needs,” and notes that his legislation would raise more than $590 billion in tax revenue over the next decade."

This proposal has been criticized for not acknowledging that subsidies are an inherent part of the global economy. Critics argue that foreign investment requires these mechanisms to occur in the first place, as other countries try to out-compete the U.S. by providing similar incentives.


Media:

Summary by Eric Revell
(Photo Credit: Flickr user CircaSassy)

AKA

Corporate Tax Dodging Prevention Act

Official Title

A bill to amend the Internal Revenue Code of 1986 to modify the treatment of foreign corporations, and for other purposes.

    "Today, we lose over $100 billion a year in revenue because large corporations stash their cash in offshore tax havens around the world. That is unacceptable." [berniesanders.com]
    Like (130)
    Follow
    Share
    A one page tax code, with a flat tax of 14.5% on individuals, businesses and corporations (with no loopholes) is a vastly more pragmatic advancement to "give onto Cesar". Only a fool looks at the reaction of these corporations; a wiseman looks at what their reacting too. Witch is a daunting, 70,000 page tax code.
    Like (10)
    Follow
    Share
    “These companies are cherry-picking the rules, and it damages the country’s finances... It adds to the deficit. It sticks you with the tab to make up for what they are stashing offshore.” [nytimes.com]
    Like (43)
    Follow
    Share
    Way past due! Businesses establish themselves here in the US and conduct the majority of their business here. Incorporating overseas in order to avoid paying taxes and thereby avoid giving back to the system that helped make them rich is absolutely criminal!
    Like (14)
    Follow
    Share
    Instead of again, adding pages to our already-extensive tax code, let's make big tax cuts and drop to a flat tax system. Also, to make them come back to the U.S., we should lessen taxes, not raise them. That's not an incentive at all.
    Like (8)
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    Share
    About time!!!!! Why didn't you think to do this when Bush crashed the economy? Or why didn't it occur to you when you became aware of the huge income inequality gap in the US? You really must be collectively dumber than the proverbial box of rocks (that means you Sen Rubio & Rep DeSantis.)
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    Big corporations need to pay their fair share in taxes! Period.
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    Corporations have paid there taxes. It's only Government who wants to double tax US corporations on overseas earnings. If US Corporations have followed the IRS taxation laws and have paid overseas taxes, case closed. Just wait, the IRS may be coming for your bank account.
    Like (3)
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    Congress won't move to tax externalities and institute either state-level LVTs or a national sales tax anytime soon, so I vote that we simply lower taxes while closing these loopholes so that capital isn't thrown out of the economic loop.
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    It's decades past time to recoup the tax money owed to the US public by large corporations stashing their profits overseas. These large corporations do not hesitate to ask the US government to smooth their way in trade hassles. It's time for them to pay for it.
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    These tax loopholes are what allow fraudulent claims of business in the Cayman Islands or St. Maarten to maintain a savings that doesn't pay taxes. People should have to pay taxes on all their income and not find sneaky ways to avoid it. Truly, the billions of dollars in lost revenue from this is devastating to our debt payoff and public services.
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    I voted for this for three reasons. 1) Companies in America must pay their fair share, if they are going to make profits in the US. 2) Increasing income taxes will help to reduce income inequality. 3) By implementing this, Americans will have increased support of the government.
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    Why is this a questions????
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    Anyone who's ever looked at the Laffer curve can tell you, when you tax more you don't increase revenue YOU DECREASE IT. The United States needs to lower taxes on businesses so we can bring more corporations to our country, and in turn create more government revenue. It's simple, it's been proven to work, and it benefits both parties in the long run.
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    Corporations need to pay their fair share in taxes. It is wrong that the average tax rate for the Fortune 10 is about 10%.
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    American taxes are meant to provide better resources for Americans. Let's hold corporations responsible.
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    If you are an American company and do most of your business here, why should you be able to not pay your full amount of taxes. These taxes are used by the government to enact policies rather than sitting in a bank account doing nothing
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    Deficit is large, not because of this loophole but because over spending on social programs & pork. Cut the crap and use that to reduce the debt
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    The idea that the problem is tax rates is ludicrous. There are already plenty of legitimate deductible business expenses; what's left is taxable regardless of where it's located.
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    Once again, Bernie shows that he doesn't understand how money works.
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