WASHINGTON – The offshore companies controlled by Treasury Secretary-designate Steven Mnuchin featured prominently in his Senate confirmation hearings held last week in Washington. It was revealed that the former investment banker managed companies with assets in Anguilla and the Cayman Islands, both widely recognized as tax havens.
Clark Gascoigne, the deputy director of the Financial Accountability and Corporate Transparency Coalition (or FACT Coalition) issued the following statement:
“It should surprise no one that an investment banker has money in offshore accounts. It’s simply a reminder of how the loopholes in the tax code allow the wealthy and well-connected to game the system—shifting money around to escape taxes that the rest of us have to pay.
“The use of tax haven loopholes by multinational companies costs American taxpayers more than $130 billion per year. Outright tax evasion by wealthy individuals drains an additional $35 billion annually. It’s time for policymakers to put an end to the gaming.
“Issues related to the offshoring of jobs and profits featured prominently in the election—both Democratic and Republican voters are frustrated that the powerful game the tax code at their expense. There’s a right way and a wrong way to reform the tax code. Instead of engaging in ideological exercises to overhaul the tax system with untested—and potentially illegal—constructs, tax reform should focus on addressing this specific problem. From the little we know, we do not see how the current congressional proposals would do much, if anything, to stop the offshoring of profits.
“Tax reform should:
- Stop giving multinationals an advantage over wholly domestic and small businesses by allowing them to defer paying taxes on their foreign earnings for as long as they want;
- Stop U.S. companies from claiming foreign residence simply to dodge taxes;
- Ensure multinationals play by the rules by publicly reporting their profits and the taxes they’ve paid on a country-by-country basis; and
- Not make things worse—for instance, by exacerbating loopholes through a territorial tax system.
- Read an HTML version of this release on our website.
- Read FACT’s “Briefing Memo: Tax Reform — Important Steps to Fix the Gaming of the Corporate Tax System”
- Read our “FACT Sheet: Questions & Answers about Territorial Corporate Tax Systems”
- Tax Notes Op-Ed by FACT’s Gary Kalman: “What Apple Teaches About How Not to Reform Corporate Taxes”
- Oxfam Blog: “Dear Republican Congress: Forget border adjustments, fix the worldwide system”
Founded in 2011, the Financial Accountability and Corporate Transparency (FACT) Coalition unites over 100 different civil society representatives from small business, anti-corruption, faith-based, government watchdog, human rights, investors, labor, public-interest, and international development organizations from across the ideological spectrum.
We seek an honest and fair international tax code, greater transparency in corporate ownership and operations, and commonsense policies to combat the facilitation of money laundering and other criminal activity by the financial system.