Center for Freedom and Prosperity
For Immediate Release
Tuesday, July 12, 2011
Senator Levin’s Latest Attack on Low-Tax Jurisdictions Would Backfire on American Competitiveness and Exacerbate FATCA Damage
(Washington, D.C., Tuesday, July 12, 2011) In what is becoming an annual summer tradition, Senator Carl Levin (D-MI) introduced today legislation persecuting low-tax jurisdictions. His so-called Stop Tax Haven Abuse Act would not only fail in its stated purpose of raising new revenues, according to Andrew Quinlan of the Center for Freedom and Prosperity, but also would reduce investment in the U.S., increase burdens on American companies, and cost jobs.
“This is the same old tune from Senator Levin,” said CF&P President Andrew Quinlan. “For years he has seemingly made it his primary objective to place Americans at a competitive disadvantage when it comes to foreign investment and U.S. corporations competing overseas. Despite pushing this legislation under the false flag of increasing revenue, his bill would drive out foreign capital and end up reducing revenue. Simply put, he is cynically exploiting our deficit – created by out-of-control federal spending – in his ongoing vendetta against jurisdictions with pro-growth tax policy.”
Senator Levin claims his proposals will collect $100 billion in elusive “tax haven” revenue, but the former Democratic staffer, Jack Blum, who first claimed such a figure 10 years ago was forced to admit when pressed by the Congressional Research Service that he fabricated the number. There is no evidence that the alleged revenues would materialize under this bill. In fact, there are several provisions in Levin’s Stop Tax Haven Abuse Act which would likely produce the opposite effect.
Levin’s new bill would expand the burden of the Foreign Account Tax Compliance Act (FATCA), exacerbating its already negative impact on the U.S. economy. Because of FATCA’s draconian reporting requirements and onerous new burdens, many foreign financial institutions have simply decided to dump both U.S. investments and clients. In addition, more reporting requirements under the so-called Stop Tax Haven Abuse Act would also increase the burdens faced by U.S. corporations, further reducing already anemic levels of job growth.
“Rather than spreading the tentacles of the IRS even further,” said Quinlan, “lawmakers should look toward reforms that will increase American competitiveness, create jobs and improve the economy. The U.S. should adopt the common-sense principle of territorial taxation, which means only taxing income earned within the territory of the United States, and reduce the exorbitant and uncompetitive 35% corporate tax rate.”
For additional comments:
Andrew Quinlan, President, can be reached at 202-285-0244, firstname.lastname@example.org
Brian Garst, Director of Government Affairs, can be reached at email@example.com