[Congressional Record Volume 148, Number 65 (Monday, May 20, 2002)]
[House]
[Page H2640]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 CORPORATIONS SEEK TAX DODGE IN BERMUDA

  The SPEAKER pro tempore (Mr. Issa). Under a previous order of the 
House, the gentleman from Oregon (Mr. DeFazio) is recognized for 5 
minutes.
  Mr. DeFAZIO. Mr. Speaker, on April 15, not that long ago, more than 
88 million Americans dutifully filed their individual income taxes. But 
now we find out that a growing number of United States corporations 
have developed a new tax dodge, a new sort of Bermuda Triangle to 
disappear their tax obligations to the Federal Government and the 
United States of America.
  That is not too surprising, given the attitude of the Secretary of 
the Treasury, Mr. O'Neill. He said that absolutely he backs the 
abolition of taxes on corporations. ``The clear economic truth is that 
businesses and corporations don't pay taxes, they just collect them for 
the government,'' he told the Financial Times. He is part right. Many 
corporations do not pay taxes anymore. The burden is growing on 
individual Americans. Thirty years ago when our corporations were the 
envy of the world and we were the manufacturing capital of the world, 
25 percent of the taxes of the United States were paid by corporations. 
Today, it is less than 10. Of course, most of our manufacturing has 
fled overseas and now those companies that have remained here are 
hoping to move their tax obligations offshore to places where they do 
not pay taxes. They say, as Stanley Works did in defending this 
practice when they held a recent vote of stockholders, it is all about 
the stockholders.
  From today's New York Times, it is not about the stockholders. It is 
about the CEOs. It is all about the CEOs. According to the New York 
Times, the CEO of Stanley Works will get 58 percent of the $30 million 
they expect to not pay in Federal income taxes by moving the 
corporation to Barbados and Bermuda. So we screw the American 
taxpayers. We screw the stockholders, too, because they are going to 
have to pay capital gains taxes. But the gentleman who runs the company 
will get a huge bonus. He might still have to pay some U.S. income 
taxes, but he probably has some smart accountants who will figure out 
how he can get around that, too.
  What is the reaction of the United States Congress to this scandal? 
We had hoped here in the United States House of Representatives, the 
people's House, that there would be some outrage about this shift of 
taxes from large, profitable corporations and their CEOs on to 
individual Americans and small businesses. But instead, on the 
Republican side, the reaction is protect these tax dodges at any cost.
  We were going to take up a bill on the marriage penalty, which is a 
real problem for American families. But on the Democratic side we were 
going to offer an amendment, an amendment to close this tax loophole, 
to break up the new Bermuda Triangle, to not allow companies that are 
based in, manufacture in, employ people in the United States of America 
to pretend that they are in Barbados and pretend that they are in 
Bermuda in order to avoid their tax obligations.
  It should not be very controversial, should it? This is a time, as we 
heard so eloquently from the gentleman before me, of great threat to 
our Nation where people should not be asking questions about who knew 
what, when, where and how. But this is something we know, and we should 
be asking, why should we allow these corporations to avoid their tax 
obligations? Why should they not join in the great patriotic need to 
raise funds to fight the threat of terrorism? Why should they enjoy all 
the privileges of American citizenship and pay not a whit for it? But 
the reaction of the House leadership was to cancel the consideration of 
the marriage penalty on another day as a regular bill and bring it up 
instead as a suspension tomorrow with no amendments allowed. God forbid 
that the United States House of Representatives should break up this 
little scam. I mean, after all, this CEO of Stanley Works will probably 
send a good part of his little take there, his $17.8 million to one of 
their fund-raisers in gratitude, maybe 10 percent, maybe 20. Who knows 
what the share will be.
  This is absolutely outrageous. The American people are paying their 
taxes. The country is under attack. We are in a huge deficit. We are 
spending the Social Security trust fund. The lockbox for Social 
Security is long gone. We are piling up a huge and growing deficit. We 
have enough controversy over the proposals by the Republicans to make 
permanent the tax cuts for the largest estates and the wealthiest 
Americans, but to allow this outrage, companies based in the United 
States of America, in all reality, to rent a post office box in Bermuda 
and a filing cabinet in Barbados and pretend they are not U.S. 
corporations anymore and not pay any taxes.
  I am ashamed of the Republican leadership.

                          ____________________