Offshore tax bill could raise $19.5 billion

Legislation to permanently limit corporations’ ability to lower their tax bills by shifting their address abroad would raise roughly $19.5 billion over a decade, according to a new estimate.

ADVERTISEMENT
The Joint Committee on Taxation, Congress’s nonpartisan scorekeeper, added that a two-year moratorium on the practice known as inversion would raise $791 million.

Sen. Carl LevinCarl LevinTrump's crush on foreign autocrats threatens democracy at home OPINION: Congress must press forward with its Russia investigation Democrats and Republicans share blame in rewriting the role of the Senate MORE (D-Mich.) and Rep. Sandy Levin (D-Mich.) are leading the charge against the practice, after Pfizer’s high-profile bid to take over AstraZeneca.

Both bills from the Levin brothers seek to build on proposals from President Obama to make it more difficult for companies to reap the tax benefits by changing their address.

Rep. Levin’s measure would permanently limit inversions, while his brother’s measure installs a two-year moratorium to allow lawmakers further time to more broadly revamp the tax code.

Under both measures, a corporation that merged with an offshore counterpart would still be taxed as American unless the foreign business’s shareholders still owned more than 50 percent of the company after the merger. The cut-off under current law is 80 percent.

The Treasury Department has estimated that Obama’s proposal on inversions would raise around $17 billion over a decade.

The bills from the Levin brothers face serious obstacles to getting passed in Congress.

Senate Finance Chairman Ron WydenRon WydenSenate bill would repeal most ObamaCare taxes, delay Cadillac tax Live coverage: Senate GOP unveils its ObamaCare repeal bill Senate Dem: GOP healthcare bill will result in ‘a lot of pain’ for millions MORE (D-Ore.) has also expressed an interest in limiting inversions, but wants any solution to be part of tax reform.

Republicans have generally said that it won’t be possible to truly solve the problem without a rewrite of the tax code.

Lobbyists have insisted that they don’t expect the push from Wyden and the Levin brothers to scare corporations away from seeking inversions.