WASHINGTON, D.C. – On the heels of a number of high-profile corporate inversions, U.S. Sen. Sherrod Brown (D-OH) introduced legislation today that would require corporations to “Pay What You Owe Before You Go.” During a news conference call today, Brown outlined his bill to require corporations to settle their U.S. tax bill for their tax-deferred foreign profits before relocating their corporate headquarters to a foreign country for tax purposes.

“Everyone knows that before you leave a restaurant you have to settle your bill – corporations shouldn’t get to play by different rules,” Brown said. “That’s why I’m introducing new legislation to make sure corporations are playing by the same rules as everyone else called ‘Pay What You Owe Before You Go.’ This measure will require corporations to pay their full U.S. tax bill before they leave the country, preventing them from sticking middle-class working people with their tab. This is a commonsense step that will increase investment here at home, and ensure a level playing field for all American companies.”

The tax code allows corporations to defer paying U.S. tax on their foreign profits until they return those profits to the U.S. Many corporations shift the ownership of their intellectual property, and fund their U.S. operations with loans from their foreign subsidiaries, in order to shift domestic profit overseas, thereby avoiding their U.S. tax obligations.

In order to get access to these profits without paying the U.S. tax bill, a number of corporations are shifting their headquarters – for tax purposes – overseas through a merger with a smaller corporation in what is called an “inversion.”

Brown’s Pay What You Owe Before You Go Act of 2016 would address these tax schemes by requiring companies to pay their full U.S. tax bill on all deferred overseas profits before reincorporating in a new country.