Brown to introduce new tax payment regulation for corporations
With American corporations keeping a record amount of profits offshore to avoid paying U.S. taxes, U.S. Sen. Sherrod Brown (D-OH) will introduce legislation requiring corporations to “Pay What You Owe Before You Go.” During a news conference call today, Brown will outline his bill that would require corporations to settle their U.S. tax bill for their tax deferred foreign profits before relocating their residence for tax purposes to a foreign country.
The tax code allows corporations to defer paying U.S. tax on their foreign profits until they return those profits to the U.S. Many corporations use gimmicks and tax loopholes to shift massive amounts of profits overseas, thereby avoiding their U.S. tax obligations on the profits. According to a new report from the Citizens for Tax Justice , Fortune 500 corporations are deferring as much as $695 billion in federal income taxes by stockpiling a record-$2.4 trillion in profits offshore. In order to get access to these profits without paying the U.S. tax bill, a number of corporations are shifting their headquarters – for tax purposes – overseas through what’s called an “inversion.” Brown’s bill would address these tax schemes by requiring companies to pay their full U.S. tax bill on all deferred overseas profits before reincorporating in a new country.