The petition to President Obama reads:
â€œTax dodging gimmicks like inversion allow major corporations to avoid paying their fair share in taxes. Crack down on tax dodging corporations by using your executive authority to eliminate tax incentives for companies to move their headquarters overseas.â€
Add your name:
Burger King made international headlines recently when it announced that it is considering using a loophole called tax inversion to dodge billions of dollars in taxes.
Walgreens considered a similar move a few weeks ago, but thanks in part to the grassroots activism of more than 75,000 CREDO activists and other progressive groups, the company ultimately backed down.1
Dozens of major American corporations have exploited the same loophole so far in 2014 and countless others are actively considering it.2 This loophole will cost the U.S. an estimated $20 billion in tax revenue over the next decade.
President Obama could eliminate much of the tax incentive for companies to move overseas by simply invoking a law that has been on the books for decades.3 He has said in recent weeks that heâ€™s considering cracking down on corporate tax dodgers4 â€“ but hasnâ€™t yet taken this basic step.
A tax inversion is a shady accounting trick that allows corporations to enjoy the benefits of doing business in the United States without paying their fair share in taxes. In essence, by moving its headquarters overseas, a company is able to loan itself money and then claim tax deductions on the money it uses to pay itself back.5
Republicans in Congress have refused to take action to stop tax inversions and the Obama administration can’t make this practice illegal. But the president can go a long way toward removing the financial incentives that make tax inversions profitable.
Section 385 of the U.S. tax code empowers the Treasury Department to largely prevent companies that perform a tax inversion from claiming tax deductions on money they loan to themselves. This one simple executive action would likely put a stop to many of the tax inversion deals currently being considered.
Sign the petition: Tell President Obama to stop corporations from dodging taxes. Click here to sign the petition now.
In the past three years, 22 major companies, including Chiquita Bananas and the pharmaceutical giant Pfizer, have attempted tax inversions.6 The surge in inversions has been driven in part by Wall Street firms like Goldman Sachs, JP Morgan and Morgan Stanley, which have raked in hundreds of millions of dollars in fees on inversion deals in the past three years.7
President Obama has called companies that take advantage of tax inversions â€œcorporate desertersâ€ who are trying to â€œget out of paying their fair share of taxes.â€8 But strong rhetoric doesnâ€™t make it harder for corporations to dodge taxes. Now we need President Obama to use his executive authority to get the job done.
Tell President Obama to eliminate the tax incentive for U.S. companies to move their corporate headquarters overseas. Click the link below to sign the petition now:
Thanks for fighting to stop corporate tax-dodging.
Josh Nelson, Campaign Manager
CREDO Action from Working Assets
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1. “Walgreens: Stand with us and stay in America,” CREDO Mobilize
2. “U.S. policymakers gird for rash of corporate expatriations,” Washington Post, August 6, 2014
3. “Obama could curb corporate ‘inversions’ on his own: ex-U.S. official,” Reuters, July 28, 2014
4. “Obama defends executive action,” The Hill, August 6, 2014
5. “Democrats Push Plan to Harness Tax Inversions,” Wall Street Journal, August 13, 2014
6. “If Congress wonâ€™t, Obama may have to address inversion,” Washington Post, August 12, 2014
7. “Wall Street Has Raked In Almost A Billion Dollars Helping Companies Move Overseas To Dodge Taxes,” Think Progress, July 29
8. “U.S. policymakers gird for rash of corporate expatriations,” Washington Post, August 5