GOP Moves to Crack Down on Corporate Tax Dodgers


Under the Republican tax bill introduced last week in the House of Representatives, giant multinational corporations get a fat tax cut — but also the threat of a stinging new levy if they continue commonly used tax-avoidance schemes.

The hope of tax writers was that the threat of a 20 percent excise tax on the sale of products from foreign subsidiaries to the parent companies would persuade businesses to move more of their operations to the United States, boosting economic growth, which would create new jobs and raise workers’ wages.

Corporations with operations in multiple countries often employ a variety of methods to reduce their tax burden in America, where the top 35 percent rate on corporations is the highest in the industrialized world. The Tax Cuts and Jobs Act would levy the 20 percent tax on payments made by U.S. companies to foreign affiliates.

The proposal has sparked a tremendous backlash from businesses and their lobbying groups and may not survive in the bill that emerges as early as Thursday from the House Ways and Means Committee. Rep. Kevin Brady (R-Texas), the committee’s chairman, proposed changes in a so-called manager’s amendment that would narrow the scope of the excise tax.

“All of this is very fluid as to what they are proposing,” said Adam Michel, a policy analyst at The Heritage Foundation.

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