Tax shelters may have sprung a leak
Two billionaires are testifying for a Senate committee today that their use of offshore tax shelter accounts was above board. Their financial advisors told 'em so. But a new report from the Senate panel says, not really. Ashley Milne-Tyte reports.
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MARK AUSTIN THOMAS: What’s wrong with having offshore tax shelters? Two billionaires are making that argument today before a Senate committee. They might find the lawmakers a bit skeptical. That committee has put out a report today which says these accounts allow the wealthy to dodge between $40 and $70 billion a year in taxes. Ashley Milne-Tyte has that story.
ASHLEY MILNE-TYTE: The report says tax havens in places like the Cayman Islands are so abundant, they deprive Uncle Sam of $40 to $70 billion in taxes each year.
It points a finger at tax lawyers and accountants for enabling such bad behavior and says they should be brought to heel.
But Edmund McMahon of the Manhattan Institute says that’s beside the point. The situation springs from a larger problem: Byzantine tax laws.
EDMUND MCMAHON: “A complex tax code is a tax code with multiple, myriad definitions of what constitutes income and what doesn’t, with all sorts of opportunities for crafty technicians to find ways to avoid taxation.”
He says the aftermath of the report should not center on victims and villains, but an overhauling the tax code so tax shelters aren’t so easy to build.
I’m Ashley Milne-Tyte for Marketplace.