At the end of 2020, our national debt was record-breaking $23.3 trillion, accompanied by a fast-growing federal budget deficit. Still, almost one-quarter of our largest corporations pay absolutely no federal income taxes at a time when corporate profits are at all-time highs. Many have shipped jobs overseas while hiding profits in offshore bank accounts to avoid paying the taxes they owe. Studies show that in 2016, 73% of our Fortune 500 companies used offshore tax havens to avoid paying their fair share of taxes. Nearly 9,000 corporations with billing addresses in the U.S. are registered at a single building in the Cayman Islands, some for decades.

A new tax avoidance scheme called corporate tax inversion has recently evolved from this “Bermuda Strategy.” This scheme involves our corporations merging with companies in countries with lower tax rates, mainly in Asia and Europe. While keeping their material operations here, these corporations then re-brand themselves as foreign companies in order to return foreign earnings to the U.S. without paying taxes. Critics say it is past time for Corporate America to stop dodging taxes and help pitch in during this time of fiscal crisis. They accuse these firms of enjoying the benefits of residing in the U.S. without equitably contributing to its welfare.

Pending Legislation: H.R.2976 - Stop Corporate Inversions Act of 2021
Sponsor: Rep. Lloyd Doggett (TX)
Status: House Committee on Ways and Means
Chair: Rep. Richard Neal (MA)