House Financial Services Committee Advances Axne Tax Haven and Offshoring Transparency Bill
Today, the House Financial Services Committee advanced legislation authored by Rep. Cindy Axne (IA-03) to promote corporate transparency on use of tax havens and offshoring American jobs.
The Disclosure of Tax Havens and Offshoring Act, introduced earlier this month with Sen. Chris Van Hollen (D-MD) would require public corporations to disclose their financial reporting on a country-by-country basis so Americans can see the extent to which they are abusing tax havens or offshoring jobs.
“Transparency from our public corporations helps investors know the risks they face by investing in them and the public know which companies are more interested in avoiding U.S. taxes and moving jobs overseas to squeeze out extra profits,” said Rep. Axne. “This vote to advance my legislation takes us one step closer to leveling the playing field for American small businesses and holding corporations accountable for exploiting tax havens while avoiding public scrutiny.”
Earlier today, Rep. Axne spoke in support of the legislation before her colleagues on the committee debated her bill. You can watch that clip here.
The bill directs the U.S. Securities and Exchange Commission (SEC) to mandate public disclosures of country-by-country financial filings– including profits, taxes, employees, and tangible assets – that public corporations already provide to the IRS on an annual basis.
These disclosures would show which corporations are employing a pattern of tax avoidance, and would give investors valuable information about the risks public companies are taking. In addition, it would discourage large corporations from utilizing practices that drain the U.S. tax base and hurt Iowa small businesses.
“Americans deserve transparency on the efforts of some corporations to exploit provisions in our tax system to ship jobs overseas and park their profits in offshore tax havens. This legislation will shine a light on these practices, as we work alongside President Biden to close these loopholes once and for all and invest these funds to build prosperity for all Americans here at home. I’m glad to see the House Financial Services Committee act on our legislation, and I’ll be pushing my colleagues in the Senate to follow suit,” said Senator Van Hollen, lead sponsor of this legislation in the U.S. Senate.
"Tax dodgers take note -- transparency is on the way," said Ian Gary, executive director of the Financial Accountability and Corporate Transparency (FACT) Coalition. "We welcome the House Financial Services Committee approval of the Disclosure of Tax Havens and Outsourcing Act. With investors worth nearly $3 trillion in assets under management supporting the measure, Congress is sending a strong message that the era of tax havens may soon come to an end."
A letter from investors with close to $2.9 trillion in assets under management that support this legislation can be found here. A letter from small business groups supporting this legislation can be found here. A letter from civil society organizations that support this legislation can be found here.
More information on the bicameral legislation can be found here.