WASHINGTON (Reuters) - Senator Bernie Sanders lashed out on Wednesday at widespread use of offshore tax havens by U.S. companies, and the liberal independent targeted a group that represents CEOs of big corporations and wants corporate taxes lowered.
Sanders, top opposition member on the U.S. Senate Budget Committee, released a report decrying what he called “legalized tax fraud.” It showed that 111 of the 201 member companies of the Business Roundtable are sheltering more than $1 trillion in profits overseas, where they are not subject to U.S. taxes.
Using the Cayman Islands, Bermuda and other tax havens, these companies have saved more than $280 billion in tax liabilities, Sanders concluded in the report.
The senator from Vermont delivered his broadside a day ahead of a media event the Business Roundtable scheduled at its Washington office. The group was expected to call again for a rewrite of the U.S. tax code including a lower corporate income tax rate.
Sanders said Business Roundtable companies account for roughly half of an estimated $2 trillion in profits held overseas by U.S. companies under a loophole that lets them defer taxation on profits from overseas subsidiaries.
The “last thing” Congress should do is provide more tax breaks to such profitable businesses, Sanders said.
“Instead of sheltering profits in the Cayman Islands and other offshore tax havens, the largest corporations in this country must pay their fair share of taxes so that our country has the revenue we need to rebuild America and reduce the deficit,” Sanders said in a statement.
Many business groups have sought a “repatriation holiday” that would allow them to bring home overseas profits at a reduced tax rate.
The senator’s report relies heavily on data compiled in June 2014 by Citizens for Tax Justice, a left-leaning activist group, and U.S. Public Interest Research Group, a consumer advocacy group that says it “stands up to powerful special interests.”
The report said the data comes from Securities and Exchange Commission filings compared with offshore subsidiaries listed in a 2008 Government Accountability Office report on tax havens.
Among Business Roundtable members listed in the report with large amounts of profits held abroad were General Electric Co with $110 billion, Pfizer Inc with $69 billion and IBM Corp with $52.3 billion.
A spokeswoman for the Business Roundtable said the group was studying the report and could not immediately comment on it.
Reporting By David Lawder; Editing by Kevin Drawbaugh and David Gregorio