[Congressional Record Volume 157, Number 105 (Thursday, July 14, 2011)]
[Senate]
[Pages S4615-S4616]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. ROCKEFELLER:
  S. 1373. A bill to amend the Internal Revenue Code of 1986 to reduce 
international tax avoidance and restore a level playing field for 
American businesses; to the Committee on Finance.
  Mr. ROCKEFELLER. Mr. President, today I am introducing the 
International Tax Competitiveness Act, legislation that will protect 
American businesses and workers by ensuring that they can compete on a 
level playing field with competitors who are using tax evasion to boost 
profits and ship jobs and dollars overseas.
  This bill targets companies that cheat the Federal Government out of 
billions of dollars a year in revenue by taking advantage of tax 
loopholes. This legislation is designed to put an end to the practice 
where American companies avoid domestic taxes by moving their 
headquarters to a post office box overseas, while their executives and 
much of their workforce remain here in the United States. If you 
benefit from the protection of American laws and the talent of the 
American workforce, you should also pay taxes here in the United 
States.
  In March, the television program 60 Minutes aired a story on tax 
avoidance

[[Page S4616]]

that centered on Zug, a town in Switzerland. While Zug has only 26,000 
residents, it is home to nearly 30,000 corporations, many of which 
operate out of mailboxes. This is because the tax rates in Zug are low 
and companies can create phony headquarters there that allow them to 
avoid higher taxes in their home country.
  The International Tax Competitiveness Act also discourages tax abuse 
related to transfer pricing. Sometimes, a company will produce a 
product here in the United States, taking advantage of generous 
research and development subsidies, and then sell it to a foreign 
subsidiary for pennies on the dollar. The royalty payments and profits 
then flow to that foreign company in a low tax jurisdiction, cheating 
the American government out of this revenue. This legislation would 
recognize many of these transactions for what they are . . . blatant 
abuse of the tax code, and treat profits as American-earned for tax 
purposes.
  At a time when members of Congress are working hard to balance the 
budget and reduce our debt, everyone must contribute to the effort and 
our laws must be obeyed. It is not fair to cut funding for valuable 
healthcare and education programs in an effort to cut spending, while 
allowing corporations to avoid paying billions of dollars in taxes.
  I want to thank my counterpart from the House of Representatives, 
Representative Lloyd Doggett, for his leadership in that body on this 
legislation. I ask my colleagues to join me in supporting this 
important legislation and thank the chair for allowing me to speak on 
this issue.
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