DES MOINES, Iowa — U.S. Rep. Cindy Axne (D-Iowa) announced new legislation Wednesday designed to shine a light on which multinational corporations are shifting profits to tax havens and offshoring jobs.
Axne made the announcement at the Des Moines headquarters of Raygun, a printing, design and clothing company whose products are union made and almost exclusively manufactured in the U.S. Raygun founder Mike Draper joined Axne at the press conference.
The Disclosure of Tax Havens and Offshoring Act would direct the U.S. Securities and Exchange Commission (SEC) to require public disclosure of country-by-country financial reports by corporations with annual revenues over $850 million.
Axne said the reports 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, the act would discourage large corporations from using practices that drain the U.S. tax base and hurt Iowa small businesses like Raygun.
“Iowa’s small businesses shouldn’t be put at a disadvantage to large multinational corporations,” Axne said. “Nor should big pharmaceutical companies be able to overcharge Americans for prescription drugs and then avoid paying taxes by shifting those profits to tax havens. 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.”
Draper said he shared the first-term Congressperson’s concern for transparency and accountability.
“Transparency leads to fairness,” Draper said. “Small businesses pay our fair share. Corporations should not be able to offshore tax through secretive tax havens. It is only in the dark that suddenly tax rates can change and fluctuate, and it is the biggest companies that exploit this darkness to reduce their rate, leaving smaller companies without that power to pick up the tab. There are simple ways, like this policy Rep. Axne has introduced, to bring more transparency to this system and level the playing field for small businesses.”
The proposed reports would include country-by-country financial filings, disclosing information — such as profits, taxes, employees and tangible assets — that these corporations already provide to the U.S. Internal Revenue Service on an annual basis.
The bill was introduced in the House by Axne and her fellow Congresspersons, Rep. Jennifer Wexton (D-Virginia), Rep. Stephen Lynch (D-Massachsetts) and Rep. Lloyd Doggett (D-Texas). The Senate version of the bill is sponsored by Sen. Chris Van Hollen (D-Maryland) along with Sen. Tammy Duckworth (D-Illinois), Sen. Sheldon Whitehouse (D-Rhode Island), Sen. Tina Smith (D-Minnesota) and Sen. Amy Klobuchar (D-Minnesota).
The legislation has received the support of 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 (AFSCME).
Last fall, a bipartisan House passed Axne’s Outsourcing Accountability Act, which focuses specifically on holding corporations accountable for outsourcing of jobs by requiring publicly-traded companies to disclose where employees are located by state and country in their annual report.
In January Axne also introduced the Offshoring Notification Act to force corporations to disclose planned outsourcing of American jobs and allow American workers to have expedited access to Trade Adjustment Assistance resources – including skills training and workforce development programs.