Tax

Democrats Demand Clawback of Outsourcers’ Tax Breaks

The Democratic Party Platform calls for a "crack down on inversions and other methods companies use to dodge their tax responsibilities."
David KatzJuly 26, 2016

Avowing a corporate tax agenda aimed at fighting outsourcing and keeping U.S. jobs at home, the Democratic Party Platform committee writes in the party’s 2016 platform that the nation must “claw back tax breaks for companies that ship jobs overseas, using the proceeds to reinvest in communities and workers at home instead.”

Vector illustration of a politician making a speech at a platform.

Besides seeing such clawbacks as a way of “fostering a manufacturing renaissance,” the framers, who drew up the platform on July 8 and July 9, contend that it would be a way of making “the wealthiest Americans and largest corporations … pay their fair share of taxes.”

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Further, the Democrats promise to “end deferrals so that American corporations pay United States taxes immediately on foreign profits and can no longer escape paying their fair share of U.S. taxes by stashing profits abroad.”

In a period of “massive income and wealth inequality like the present,” Democrats, if elected, would “crack down on inversions and other methods companies use to dodge their tax responsibilities,” according to the platform. (In an inversion, a U.S.-based multinational typically merges with an offshore partner and replaces its U.S.-based parent company with a new foreign holding company domiciled in a low-tax country.)

The party notes that the oil and gas, pharmaceuticals, and financial services industries have benefited from tax breaks at the expense of the public. Democrats are thus promising to “eliminate tax breaks for big oil and gas companies.” Further, according to the platform, the biggest pharma companies “are making billions of dollars per year in profits at higher margins compared to other industries while many stash their profits in offshore tax havens.”

Proposing that they will “fight against the greed and recklessness of Wall Street,” the Democrats say they’ll “support a financial transactions tax on Wall Street to curb excessive speculation and high-frequency trading, which has threatened financial markets.”

At the same, they acknowledge “that there is room within our party for a diversity of views on a broader financial transactions tax.”

In addition to sticks, the Democrats are offering carrots to companies that focus on domestic business. “We will make sure that our tax code rewards businesses that make investments and provide good-paying jobs here in the United States, not businesses that walk out on America.”

The party also plans to use the tax code to enact their energy policies. “Democrats believe the tax code must reflect our commitment to a clean energy future by eliminating special tax breaks and subsidies for fossil fuel companies as well as defending and extending tax incentives for energy efficiency and clean energy,” according to the platform.

Image: Thinkstock

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