A group of Democrats in the House and Senate has introduced legislation that would require large multinational corporations to provide country-by-country financial reports indicating whether they are using offshore tax havens.
The Disclosure of Tax Havens and Offshoring Act would require the Securities and Exchange Commission to mandate public disclosure of country-by-country reports of their profits, taxes, employees and tangible assets by corporations that have annual revenues over $850 million.
The bill was introduced Thursday in the House by Rep. Cindy Axne, D-Iowa; Jennifer Wexton, D-Va.; Stephen Lynch, D-Mass.; and Lloyd Doggett, D-Texas. The Senate version is sponsored by Sen. Chris Van Hollen, D-Md.; Tammy Duckworth, D-Ill.; Sheldon Whitehouse, D-R.I.; Tina Smith, D-Minn.; and Amy Klobuchar, D-Minn.
The legislation aims to show which multinationals are avoiding their corporate taxes, and give investors information about the risks taken by the companies.
“Shining a light on these practices will help investors and the public understand the risks that public corporations are taking to try and squeeze out extra profits,” said Axne in a statement.
“Transparency leads to fairness,” added Mike Draper, the founder of Des Moines, Iowa-based T-shirt maker Raygun, in a statement. “Small businesses pay our fair share. Corporations should not be able to offshore tax through secretive tax havens.”
The legislation has received support from the Institute for Taxation and Economy Policy, the Financial Accountability and Corporate Transparency (FACT) Coalition, and the American Federation of State, County and Municipal Employees.
“The Disclosure of Tax Havens and Offshoring Act would provide straightforward information about where multinational companies do business and pay taxes — codifying the emerging trend toward transparency,” said Clark Gascoigne, interim executive director of the FACT Coalition, in a statement. “Shining a light on the offshore practices of corporations would help expose abusive tax-dodging schemes — better protecting taxpayers, informing policymakers, and safeguarding investors."