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Democrat slams companies that use offshore tax havens

Democrat slams companies that use offshore tax havens

WASHINGTON (CNN) -- Companies that move their legal residences to places such as Bermuda to shave their federal income tax bill are "unpatriotic," and Republicans have left open a loophole that allows them to "abandon their U.S. responsibilities," a Democratic congressman charged Saturday.

"Last month, while the citizens of this country were paying their income taxes, some of America's largest corporations decided they no longer wanted to pay their fair share of U.S. taxes," Rep. Jim Maloney of Connecticut said in his party's weekly radio address.

"Instead, they sought out a tax loophole, and are trying to exploit it for their own gain," Maloney said. "For little more than the cost of a post office box in an offshore tax haven like Bermuda, U.S. companies are trying to avoid many millions of dollars in federal taxes."

Maloney criticized toolmaker Stanley Works, based in New Britain, Connecticut, for trying to reincorporate in Bermuda to save millions in taxes, after closing a factory in Connecticut.

"Stanley prominently stamps 'U.S.A' on its products, while at the same time ships its jobs overseas, ships its corporate entity to Bermuda and will end up evading virtually all of its U.S. taxes," Maloney said. "Connecticut has not seen an outrage like this since Benedict Arnold -- the Connecticut traitor -- sailed away."

The Democrat said he and Rep. Richard Neal, D-Massachusetts, are sponsoring a bill to stop the use of off-shore tax havens.

"Our bill simply says that corporate expatriates, who are U.S. companies in fact, must continue to pay their fair share of U.S. taxes," Maloney said.

"While we are working hard to stop this practice, the Republican leadership has done nothing to help close this abusive loophole," Maloney said.

He also blamed Republicans for the growing federal budget deficit and a large reduction in the federal surplus, which he linked to GOP tax cuts. The moves have placed the Social Security and Medicare programs in jeopardy, he said.




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