Think Tank On Corporate Profit Shifting
A US corporate minimum tax would directly combat profit shifting to offshore financial centres like Bermuda and lessen the American tax code’s bias toward foreign investment, says a highly influential Washington DC think tank.
In a major briefing paper written for the Centre for American Progress, the advocacy group’s Director of Fiscal Reform Seth Hanlon says Washington lawmakers need to restrict the ability of US corporations to reduce their American tax bills by reporting profits earned all over the world in low- or no-tax jurisdictions like Bermuda and the Cayman Islands.
Issued on Friday [Feb. 10], Mr. Hanlon’s report said corporate profit shifting costs the US more in revenue every year than the country spends on the entire Department of Education or Department of Homeland Security.
“Profit shifting erodes the corporate revenue base, draining the United States of tens of billions of dollars in revenue every year,” he said. “And it is getting worse. The US government was estimated to have lost about $90 billion in revenue in 2008 from profit shifting, up from $60 billion in 2004. To put that figure in perspective, the corporate income tax only raised an average of $300 billion per year during the 2004-08 timespan, suggesting that profit shifting is draining the US Treasury of a significant share of corporate tax revenues.”
A progressive public policy research and advocacy organisation, the Centre for American Progress says it is “dedicated to improving the lives of Americans through progressive ideas and action.”
Its current president and Chief Executive Officer is Neera Tanden, a veteran of the Obama and Clinton Presidential Administrations and Hillary Rodham Clinton’s Senate and Presidential campaigns.
The founding president and CEO was John Podesta, who served as chief of staff to then US President Bill Clinton. Mr. Podesta remains with the organisation as chairman of the board.
The Centre’s views are said to carry particular weight among policymakers in the Obama Administration, with an article in “Time” magazine stating that “not since the Heritage Foundation helped guide Ronald Reagan’s transition in 1981 has a single outside group held so much sway” with the White House.
The full report is below, click Fullscreen for greater clarity:
