Today, there are far too many companies who ship jobs overseas and take advantage of our country’s laws and workers. A strategy some companies use to exploit a loophole in our tax code is called “inversion”. This involves a company moving its headquarters overseas, but only on paper, in order to avoid paying U.S. taxes. Fifty of the 75 American corporations that have inverted since 1994, have done so in just the last ten years.
Most companies keep their actual headquarters in the U.S. because they benefit from access to millions of U.S. customers and an educated workforce; protection through U.S. patent laws; and investments the federal government makes in basic research. Those that renounce their American corporate citizenship, however, reap the same benefits as other U.S. companies, but avoid paying billions in taxes. There are nearly a dozen companies reportedly currently considering this corporate tax dodge.
Recently, by news that North Chicago-based company AbbVie decided to acquire Dublin-based Shire and dodge corporate taxes by inverting. For decades, AbbVie (formerly part of Abbott Labs) used taxpayer-supported medical research, infrastructure, and even protections from the government’s patent office to become one of the nation’s most profitable companies. Now, the company is moving its headquarters to the island of Jersey to duck their corporate responsibility and escape U.S. taxes.
Those are tax revenues that will not be invested in basic research at the NIH to support the development of new drugs, or the highways and airports that serve AbbVie, or the federal system of patent protections from which the company has profited greatly.
In addition to AbbVie, Illinois-based Walgreen Company is reportedly considering a similar move. this week to the company urging them to remain headquartered in the U.S. and not turn their backs on the very people that have allowed the company to thrive and prosper.
A company should not profit off of millions of dollars of defense contracts—paid for by taxpayers—and then move their tax domicile overseas to get out of paying their U.S. tax bill. Last week, the Senate Appropriations Committee made sure to prevent this. It approved the fiscal year 2015 Department of Defense appropriations bill which included a provision prohibiting companies that invert from receiving defense contracts. It is my hope Congress will pass this bill soon.
In the last decade, 2.4 million American jobs have been sent overseas.
To help bring an end to this business practice, the Senate will vote this week on the . This bill, which I am proud to co-sponsor, would close the tax loophole for corporations that ship jobs overseas and extend tax credits to those companies that return jobs back to America. The bill will do the following to incentivize companies to stay on American soil:
This shouldn’t be a Democratic issue or a Republican issue – this affects all of us as American taxpayers. Our tax code should reward companies that keep their operations in America, and not those who ship jobs overseas. I hope the Senate will act quickly to pass this bill. It’s time to stop tax dodging corporations from gaming the system. Instead, let’s make sure our companies are investing in the American worker and the economy at home.
Read more of my thoughts on this topic in Thursday's Chicago"Tribune.
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Sent from the office of U.S. Senator Dick Durbin