Report: Banks aid offshore tax dodge
The report from the Senate Permanent Subcommittee on Investigations says the U.S. loses $100 billion a year in tax revenue to tax havens arranged by Wall Street banks for foreign investors. Janet Babin has more.
Sen. Carl Levin (D-MI, chairs the Senate panel that is releasing a report today on dividend tax abuse through offshore entities. (Alex Wong/Getty Images)
More on The Economy, Taxes, Wall Street
Links
- Read the report
pdf of Senate report on Dividend Tax Abuse: How Offshore Entities Dodge Taxes on U.S. Stock Dividends - Sen. Carl Levin's opening statement
Opening statement from Sen. Carl Levin for hearing on Dividend Tax Abuse report
TEXT OF STORY
Renita Jablonski: A Senate subcommittee has found offshore tax abuse costs the U.S. $100 billion a year. Senate leaders will release the full results of their yearlong investigation at a hearing today. Marketplace's Janet Babin reports from North Carolina Pubic Radio.
Janet Babin: The inquiry comes out of the bipartisan Senate Homeland Security and Governmental Affairs Subcommittee. It accuses Wall Street firms of making it easier for their foreign clients to get out of paying dividend taxes. The panel also says the IRS failed to keep the abuse in check.
Some senators are calling for legislation to take tax-avoidance gimmicks off the market. But former treasury department economist Bruce Bartlett says this zeal to raise tax revenues might impose a hidden cost on us.
Bruce Bartlett: ... to the extent we go after them and are successful in doing so, we're going to reduce investment in the United States by foreigners.
Bartlett says some tax evasion's inevitable; the price we pay to be a part of the global economy. Executives from Lehman Brothers, Morgan Stanley, Deutsche Bank and the IRS are expected to testify at today's hearing.
I'm Janet Babin for Marketplace.
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