Much attention has been focused on undocumented children entering the United States but Sen. Bernie Sanders thinks a more pressing issue is the number of corporate giants leaving the country to avoid U.S. taxes.
The Vermont Independent today announced legislation to ban those businesses from receiving lucrative U.S. government contracts.
Sanders said that he will file an amendment to a Department of Defense authorization bill to prohibit the U.S. government from awarding federal contracts to companies that reincorporate overseas to avoid paying U.S. income taxes.
“I have a message for these corporate deserters: You can't be an American company only when you want corporate welfare from American taxpayers or you want lucrative contracts from the federal government. If you want the advantages of being an American company then you can’t run away from America to avoid paying taxes.”
AbbVie and Walgreen's
Sanders announced the legislation on the same day pharmaceutical giant AbbVie said it plans to take over Shire, its European rival, in a merger that would allow the Chicago-based drug maker to reincorporate in Britain and lower its effective U.S. income tax rate from 22 percent to just 13 percent by 2016.
Walgreen’s, the giant drugstore chain, recently announced that it is considering moving its corporate headquarters from the U.S. to Switzerland to avoid $4 billion in U.S. taxes over the next five years. According to a recent report from Americans for Tax Fairness, nearly a quarter of Walgreen’s $72 billion in sales last year came from Medicare and Medicaid.
At least a dozen other major companies are considering abandoning America through a loophole in the tax code known as corporate inversion. Such inversions allow U.S. companies to move their corporate headquarters overseas by merging with a foreign company in a low-tax country, even though most of their profits and sales occur in America.
“Companies that have received billions in corporate welfare and have made billions in profits should not be allowed to renounce their U.S. citizenship to avoid paying U.S. taxes,” Sanders said.