Danny Katz
Executive Director, CoPIRG
Executive Director, CoPIRG
CoPIRG
The Colorado House Finance Committee approved a bill that would close a tax loophole that allows large multinational corporations to avoid paying their share in taxes. The bill, HB15-1346, sponsored by State Representatives Brittany Pettersen and Mike Foote, would close the so-called “water’s edge loophole” that some companies use to dodge their Colorado tax bill leaving average Colorado families and small businesses to pick up the tab.
“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 Danny Katz, CoPIRG Director.
During testimony, Mr. Katz presented a list of over 300 small businesses from across Colorado that have signed a letter calling for policy makers to act on a state and national level and close loopholes that cost Colorado an estimated $2.2 billion and $110 billion nationally.
Every year, corporations avoid paying an estimated $110 billion in state and federal income taxes by using complicated accounting tricks to book their profits to subsidiaries in offshore tax havens. This leaves small businesses to compete on an uneven playing field, and they, along with the average taxpayer, end up picking up the tab in the form of higher taxes, cuts to public priorities, or bigger deficits.
Many of America’s largest and best-known corporations use these complex tax avoidance schemes to shift their profits offshore and drastically shrink their tax bill. GE, Microsoft, and Pfizer boast some of the largest offshore cash hoards:
HB15-1346 was modelled off a similar policy implemented in states like Montana and Oregon. Montana’s version has been in place since 2005. HB15-1346 will be heard next in the House Appropriations Committee.
For more information on the costs of offshore tax havens to Colorado, click here for a copy of “Picking up the Tab: Small Businesses Pay the Price for Offshore Tax Havens.”
Click here to see an earlier study showing how states can crack down on offshore tax dodgi