We stand up for a Massachusetts where everyone gets a fair shot, does and pays their fair share, and plays by the same rules.
As millions of people are rushing to file their tax returns by tomorrow’s deadline, Massachusetts Fair Share, MASSPIRG, Rep. Josh Cutler (D-Duxbury) and Rep. Lenny Mirra (R-West Newbury) spoke about the need to make our tax system more fair. According to a new study by the MASSPIRG Education Fund, the average Massachusetts small business owner would have to pay an extra $4,031 in state and federal taxes to make up for the money lost in 2014 due to offshore tax haven abuse by large multinational corporations. Rep. Cutler and Sen. Montigny have introduced a bill to close such a loophole, An Act closing a corporate tax haven loophole (HB 2477 and SD 1699), which is cosponsored by a bipartisan group of 57 lawmakers, including Rep. Mirra.
Closing a loophole that lets big companies avoid taxes might not make Tax Day any easier, but it will make it more fair. As lawmakers work through the budget they have a lot of tough choices, but this one is easy. Everyone should play by the same set of rules.
Over the last year, Massachusetts Fair Share has generated more than 6,000 comments in favor of state action to close one loophole which allows companies to hide profits offshore, which costs the state $79 million per year.
“When large companies shirk their taxes, small businesses get stuck with part of the bill and are put at a competitive disadvantage. Businesses should compete on innovation and the quality of their products, not on the cleverness of their tax attorneys,” said Deirdre Cummings, Legislative Director for MASSPIRG.
“Small businesses already face plenty of challenges, we should not ask them to compete in a rigged marketplace favoring a few corporate giants that can afford to exploit our tax code in this manner,” said Representative Josh Cutler, Chief House sponsor of the bill. “It’s time to close this loophole and let our Bay State businesses compete on a level playing field. This legislation will help ensure that the burden of paying for our state’s roads, bridges, schools and public services is shared equitably. Let’s promote innovation and creativity in the marketplace, not in our tax code.”
“The abuse of offshore tax havens undermines public confidence in our tax system. It adds to the deficit, as well as to the tax burden of all of us who play by the rules,” said Representative Lenny Mirra, a bill cosponsor. “We need to ensure that the responsibility of paying for public priorities is shared fairly.”
“For too long, multinational corporations have skirted their fair share of tax obligations through the abuse of murky off shore tax loopholes that a phalanx of lobbyists, year in and year out, protect for special interests. This is outrageous and egregiously unfair to the many hard working people of Massachusetts, who are expected to pay their fair share of taxes every year. The time is now to end these unscrupulous loopholes and make everyone pay their fair share. This legislation would level the playing field and serve far more pressing public priorities than the enrichment of corporations and their lobbyists,” said Senator Montigny, Assistant Majority Leader, in remarks provided.
The bill, already a law in place in Oregon and Montana, also known as the “water’s edge” loophole, would require that companies treat profits made in Massachusetts and funneled to known tax havens like the Cayman Islands as domestic taxable income.