A bill has been introduced that would prevent companies that have attempted to avoid taxes by reincorporating overseas from obtaining federal contracts. It’s the second time a measure has been presented to limit the growth in the number of corporate expatriates.
“When millions of Americans are paying their tax bill we are once again reminded that some unscrupulous companies are avoiding their tax obligations at the expense of those paying their fair share,” DeLauro said Thursday. “Even worse, the federal government has been subsidizing this bad behavior, by continuing to reward inverted companies with lucrative federal contracts.”
The legislation, H.R.1809, the “No Federal Contracts for Corporate Deserters Act of 2015,” was introduced by U.S. Rep. Rosa DeLauro, D-3rd District, as a response to a surge in so-called “corporate inversions” last year.
According to a report issued last May by the Congressional Research Service, over the past 10 years, 47 U.S. corporations reincorporated overseas, more than during the previous 20 years put together.
Between 1994 and 2014, a total of 75 corporations avoided paying taxes in the United States by inverting. The first corporate inversion was undertaken by McDermott International Inc., which reincorporated from Louisiana to Panama in 1983.
An April report by BloombergBusiness identified three more corporate inversions completed in 2015 with at least five more pending.
Also called expatriation, corporate inversions result in the original U.S. corporation becomings a subsidiary of a foreign parent corporation. Only one Connecticut company has thus far undergone an inversion, Arch Capital Group Ltd., which reincorporated in Bermuda in 2000. As of 2014, the property and casualty insurance giant had annual sales in excess of $3.46 billion.
“These companies take advantage of our education system, our research and development incentives, our skilled workforce, and our infrastructure, all supported by U.S. taxpayers, to build their businesses,” DeLauro said. “But when the tax bill comes due, they hide overseas. Yet suddenly, when federal contracts are being applied for, they are all as American as Uncle Sam once again. This has to stop.”
U.S. Rep. Sander Levin, D-Mich., one of DeLauro’s co-sponsors on the bill, said last year that limiting inversions could save U.S. taxpayers $19.5 billion over 10 years.
“Barely a week seems to pass without news that another corporation plans to move its address overseas simply to avoid paying its fair share of U.S. taxes,” Levin said. “These corporate inversions are costing the U.S. billions of dollars and undermining vital domestic interests. We can and should address this problem immediately through legislation to tighten rules to limit the ability of corporations to simply change their address and ship U.S. tax dollars overseas.”
Blumenthal Seeks Tech Protections for Students
Connecticut’s Sen. Richard Blumenthal is reportedly working on a bill that would allow students the free and unencumbered information sharing they have come to expect but provide a heightened level of protection.
As Politico reported, Blumenthal’s bill is similar to one crafted by U.S. Rep. Jared Polis, D-Colo., and Luke Messer, R-Ind., H.R. 2092, which would “require operators that provide online and similar services to educational agencies or institutions to protect the privacy and security of personally identifiable information, and for other purposes,” according to the bill text.
“I’m very concerned about the potential for intrusive and dangerous invasion, but also the sale and exchange of data about students,” Blumenthal told Politico’s Morning Education. “There need to be greater protections.”
Blumenthal is a member of the Senate Commerce, Science and Transportation Committee, which would get a first crack at his bill when and if it is introduced.
Jordan Fenster lives with his family in Fairfield County. He can be reached by or @JordanFenster on Twitter.
EDITOR’S NOTE: Introducing CTNewsJunkie’s latest offering — updates on Connecticut’s congressional delegates and their activities at the nation’s Capitol.
We are launching this feature in conjunction with our installation of new software from VoteTocracy.com, which provides a database of information on bills and lawmakers from around the country, and the option for you, our readers, to register with VoteTocracy to vote “yes” or “no” on bills your delegates are considering.
Just float your mouse over the highlighted words in these reports, and windows will pop up to provide you with more information. VoteTocracy is free for you to use. Just follow instructions to register and let your voice be heard. Click here for more info on VoteTocracy. We hope you enjoy this new feature!