Congress Continues Helping Multinational Tax Dodgers

Abigail Field

benzinga.com

On Tuesday the House Ways and Means Committee sent a package of bills to the House floor, that would cost American taxpayers hundreds of billions of dollars over the next ten years by making permanent tax provisions multinational corporations use to avoid U.S. tax.

“For all of the talk in Washington about getting our fiscal house in order, the Committee did not consider how to pay for these expensive tax breaks," said Dan Smith, U.S. PIRG Tax and Budget Advocate, "despite repeated attempts by Ranking Member Sandy Levin to raise the issue."

H.R. 4429 would re-enact the currently expired "active financing" provision, and make it permanent. This provision is known as the "GE" loophole, because General Electric (NYSE: GE [FREE Stock Trend Analysis]) not only prodigiously benefits from it, but also because the company has sent an army of lobbyists to ensure the provision was re-enacted. (It expired at the end of last year.)

Making the GE loophole permanent would cost nearly $60 billion over ten years, according to the Joint Committee on Taxation...

Another bill that cleared committee Tuesday was H.R. 4464, which would re-enact the "CFC look through" rule and make it permanent. This provision is known as the Apple (NASDAQ: AAPL) loophole, because Apple innovated it  and uses it to protect billions it would owe U.S. tax on if the tax code looked at where the money was earned--where the value was actually generated--rather than where companies can assign the profits. Making the Apple loophole permanent would cost $20.3 billion over ten years, according to the Joint Committee on Taxation.

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