WASHINGTON, DC – Today, U.S. Sen. Sherrod Brown (D-OH) applauded a tax reform draft released by the Senate Finance Committee that incorporated his proposal to overhaul the corporate tax code and spur domestic investment through the establishment of a global minimum tax. A global minimum tax would strengthen American competiveness by preventing profit shifting and base erosion, and shutting down tax havens.
“It’s time that our corporate tax code encourages investment in the U.S., rather than profits being shifted overseas,” Brown said. “Corporate tax reform is necessary to ensure that the American economy can continue to attract investment and compete on an even playing field. We can do that by closing down tax havens that cost our country revenue and cost American workers jobs. I applaud Chairman Baucus for incorporating my proposal to create a global minimum tax rate. This would raise revenue and prevent a global race-to-the-bottom.”
During a news conference call in July, Brown announced his plan to overhaul the corporate tax code by creating a country-by-country global minimum tax, which would close offshore tax havens and eliminate incentives for tax arbitrage. By applying a minimum rate to all offshore profits, we will minimize the ability to profit from aggressive tax planning.
Brown argued that tax reform must ensure that our nation secures its fiscal future while addressing the challenges of an increasingly globalized economy. Currently, U.S. multinational corporations book more than 40 percent of their profits in so-called “tax havens” that contain seven percent of their actual foreign investments and four percent of their foreign workers. For example, the profits of U.S. controlled foreign corporations booked in Bermuda represent 646 percent of that nation’s Gross Domestic Product (GDP).