Senate Dems tackle offshore tax deals

The Senate’s No. 2 Democrat is pushing legislation to try to keep U.S. corporations from shifting their legal address abroad to reap tax benefits.

Majority Whip Dick Durbin’s measure would award tax credits to businesses that keep their headquarters in the U.S., and offer a variety of other benefits to their employees – like health insurance and higher wages.

"We should be rewarding companies that invest in their workers by providing fair wages, health insurance and retirement benefits,” Durbin (D-Ill.) said in a statement.

"In a time of tight budgets, we should reserve tax credits for the companies that do the most to help workers and our economy here at home.”

Five other liberal senators – Sens. Tammy Baldwin (D-Wis.), Sherrod Brown (D-Ohio), Jack Reed (D-R.I.), Bernie Sanders (I-Vt.) and Elizabeth Warren (D-Mass.) – joined Durbin in introducing the measure. The senators would pay for the tax credits by limiting interest deductions that corporations use for offshore investments.

Durbin’s bill comes as Democrats are taking an increasingly closer look at so-called inversions, when U.S. companies change their legal address and often slash their tax bill.

Walgreen’s, the pharmacy chain based in Durbin’s home state of Illinois, is considering a move to Switzerland. Congressional interest in inversions bubbled up again after the U.S. drug maker Pfizer tried to take over AstraZeneca, its British counterpart.

Republicans say that the Democratic interest is misguided, and that lawmakers should instead concentrate on lowering the U.S. corporate tax rate to give companies incentive to stay.