House Bars Export-Import Loans to Companies in Tax Havens
Companies that incorporate outside the United States to avoid taxes would no longer be eligible for Export-Import Bank loans under a House of Representatives proposal.
“They don't want to pay taxes in America. Not them. That's for the suckers of this country,” said bill sponsor Rep. Bernie Sanders, a Vermont independent.
The House on Wednesday voted 270-132 to add the amendment to an annual foreign aid bill, Bloomberg reported. The government-backed Export-Import Bank provides loans to U.S. exporters or makes loan guarantees for capital needed to fulfill an order and to foreign buyers importing American goods.
Peter Saba, chief operating officer at the Export-Import Bank, said the loan provision would cost American jobs. Two companies incorporated in Bermuda together employ 40,000 Americans - Ingersoll-Rand, which sells doors and construction equipment, and Weatherford International Ltd., one of the largest oilfield-services companies.
Ingersoll-Rand, which is operated from Woodcliff Lake, N.J., has received more than $370 million in subsidized loans, loan guarantees and other financial assistance from the Export-Import Bank since 2003, according to Sanders. Weatherford International Ltd., with offices in Houston, has received $300 million in assistance from the Export-Import Bank since 2003, Sanders said.
Saba said, “If there are issues with the offshore incorporation of companies or their parents, those issues should be addressed directly in other relevant legislation.”
Ingersoll-Rand spokesman Paul Dickard said lawmakers should help companies compete in a global market. Shareholders approved a plan for Ingersoll-Rand to reincorporate in Bermuda in 2001 to level the playing field with foreign rivals with a lighter tax burden.
“When these other debates take place on Capitol Hill, we do our best to educate lawmakers, and we have faith that wisdom will prevail over rhetoric,” Dickard said.
Rep. Dana Rohrabacher (R-Calif.) said corporate taxes are too high in the U.S., but companies shouldn't get taxpayer-financed subsidies if they aren't paying as much into the Treasury as others.
“Companies are going to have to make a decision about whether they are part of the American family,” he said.