Visit Red Revolution Media's online store for all your socialist, progressive and protest fashions. From t-shirts to cushions, there's something for everyone!

Advertisement

‘Another Gift’ to Big Business As Trump Treasury Moves to Eliminate Rules Against Corporate Tax Avoidance

President Donald Trump’s Treasury Department on Thursday took the first step toward eliminating remaining regulations designed to prevent corporations from avoiding U.S. taxes by storing profits overseas, a move critics decried as yet another harmful giveaway to big business.

Treasury Secretary Steve Mnuchin, a former Goldman Sachs executive, said in a statement that the 2017 GOP tax law—which disproportionately benefited the rich—rendered Obama-era rules against offshore tax avoidance “obsolete” by significantly reducing the corporate tax rate.

Sen. Ron Wyden (D-Ore.), the top Democrat on the Senate Finance Committee, disagreed with Mnuchin’s assessment, warning in a statement that the Treasury Department’s plan “only provides an opening for corporations to again dodge their taxes.”

“The corporations that got a massive taxpayer handout are getting another gift from Donald Trump,” said Wyden. “The Obama administration had essentially shut down inversion—transactions whose only purpose is to help big multinational corporations move overseas to avoid paying taxes.”

According to Bloombergthe Treasury Department’s proposal, detailed in a policy guidance (pdf) released Thursday, “could make it easier for firms to use accounting tactics to minimize their U.S. earnings and inflate their foreign profits, which are frequently taxed at rates lower than the current 21 percent domestic corporate levy.”

“The existing regulations were aimed at stopping American companies from moving their headquarters to a lower-tax country, a process known as a corporate inversion,” noted Bloomberg.

Contrary to Mnuchin’s claim that the GOP’s 2017 tax law eliminated incentives for corporations to shift profits overseas, advocacy groups and Democratic lawmakers have argued the law made it easier for businesses to avoid U.S. taxes.

“The Tax Cuts and Jobs Act (TCJA) will allow companies to avoid taxes on $235 billion in profits each year going forward,” a coalition of more than 50 progressive organizations led by Americans for Tax Fairness wrote in a letter (pdf) to Congress last May.

“Moreover, the law created new incentives for multinational corporations to move their real operations offshore,” the groups said. “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.”

Advertisement


SUPPORT RED REVOLUTION MEDIA


This website is not sponsored or endorsed by big business, corporations or billionaire oligarchs, we have no resources and no backing. We rely on you to keep going.


Our monthly expenses include hosting services, specialist website subscriptions and services, photo media subscriptions, newswire services, and marketing. We currently are unable to issue any payment to writers.


It is our hope that we will one day be able to be a people funded and maintained service who are uniquely positioned to give a voice to the voiceless without any influence from corporatism.


If you value our articles please consider a donation to ensure the continuation of our work. Thank you.


DONATE

 


SUBSCRIBE AND FOLLOW
Sign up to our newsletter and follow us on social media to get the latest news, updates from Red Revolution Media.
You can unsubscribe at any time

Advertisement

Common Dreams

This article is republished from Common Dreams under a Creative Commons 3.0 license.