October 14, 2016 02:06 PM | Permalink |
The final earnings stripping regulations released Thursday by the U.S. Treasury Department de-incentivizes corporate inversions and makes it more difficult for corporations to avoid taxes by loading their U.S. subsidiaries with debt. Following is a statement by Robert S. McIntyre, director of Citizens for Tax Justice:
“While these new regulations are a welcome step forward, the problem of offshore tax avoidance still looms large. It removes one tool for tax avoidance, but corporations still have a vast arsenal. A recent CTJ study found that multinational companies are now holding $2.5 trillion offshore, which allows them to avoid a stunning $718 billion in U.S. taxes.
“These new regulations are a reminder that while executive action can play an important role in cracking down on offshore tax avoidance, only legislative action can put a full stop to offshore tax avoidance. To that end, Congress should further crack down on earnings stripping by passing the Corporate Fair Share Tax Act or related legislation that would limit the ability of corporations to use debt financing to artificially shift profits offshore.”