Democrats and Republicans would be hard-pressed not to agree that an extra $100 billion would’ve come in handy during the contentious budget battles of recent weeks.
It’s money already owed to the nation, mostly by its own citizens. Making it easier to collect, however, is the tricky part.
“The revenues lost to tax havens might have — all by themselves — resolved the [budget] problem,” said Sen. Carl Levin, Michigan Democrat. “Whether you, like me, believe the budget cuts proposed by House Republicans are too deep, or whether you are a tea party fan who would use that revenue to fund additional tax cuts, there is no doubt that closing down tax-haven abuse would make a big dent in the problems we face.”
Every April, as tax day approaches, many companies and wealthy individuals hide money or distort commerce in foreign bank accounts, said Nicholas Shaxson, author of “Treasure Islands: Tax Havens and the Men Who Stole the World.”
The amount of money lost is “much, much bigger than almost anyone realizes,” said Mr. Shaxson, who spoke Tuesday to the Financial Accountability and Corporate Transparency coalition.
Mr. Levin chairs the Senate permanent subcommittee on investments, which estimated in 2006 that offshore tax abuses cost the nation about $100 billion in lost revenue. He plans to reintroduce two bills that could help combat tax evasion, hoping the plans will gain more steam this time around with lawmakers searching for ways to address the ballooning national deficit.
One of them — the Stop Tax Haven Abuse Act — originally was introduced in 2004 and would allow the United States to take steps against offshore financial institutions or jurisdictions that impede tax enforcement.
For example, the Treasury Department could prevent U.S. banks from doing business with or honoring credit cards from banks in countries that don’t cooperate.
The Incorporation Transparency and Law Enforcement Assistance Act would require states to collect the names of a company’s owners, which are sometimes hidden, and supply them to law enforcement agencies and the IRS upon subpoena.
“It’s a heck of a lot harder to argue for an end to offshore secrecy in tax-haven countries if we don’t put our own house in order,” he said.
If passed, these bills would join the Foreign Account Tax Compliance Act in combating tax evasion. This bill, which Congress enacted last year, will go into effect in 2013 and require overseas banks to disclose to the IRS all accounts opened by U.S. depositors. Those that don’t disclose would face a 30 percent withholding tax on all their U.S. income.
The country needs to “get serious about shutting down offshore tax abuses that continue to rob this country of needed tax revenues,” Mr. Levin added.
Otherwise, he said, everyday taxpayers will continue to pick up the slack.
“The families who pay their fair share will have to pay more, because they will have to carry the load for the tax-dodgers using offshore havens to evade their taxes.”
© Copyright 2013 The Washington Times, LLC. Click here for reprint permission.
Tim Devaney is a national reporter who covers business and international trade for The Washington Times. Previously, he worked for the Detroit News, Grand Rapids Press, Portland Press Herald and Bangor Daily News. Tim can be reached at email@example.com.
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