Secretary Mnuchin Insurance Tax-Haven Loophole Letter
Dear Secretary Mnuchin,
We, the undersigned organizations promoting free markets and conservative policy, urge you to keep your commitments of simplifying the tax code and providing relief to all individuals and businesses at the forefront of future tax reform discussions. This means guaranteeing that loopholes, particularly the insurance tax-haven loophole, are not resurrected at the expense of reduced income-tax rates.
As advocates for free enterprise, we work to ease the tax burden that stifles economic growth and harms the American people. We commend you for standing firm on the principle of lower taxes for all Americans during the formation and public discussion over the Tax Cuts and Jobs Act. The great success of tax reform is due, in part, to Congress and the administration nixing most tax exemptions for lower rates across the board. Thanks to your leadership, all Americans – from single, blue-collar mothers to America’s most successful entrepreneurs – have benefited from the most comprehensive tax relief package since 1986.
However, it has come to our attention that certain groups are now, whether intentionally or not, working to undermine your historic achievement. These groups are lobbying to bring back many of the special-interest loopholes the administration eliminated as a means of reducing individual and corporate income tax brackets. One of the most egregious examples is the mounting pressure from foreign-owned/foreign-based insurance companies to secure a competitive advantage over U.S. based companies. These foreign-based entities want to shift billions of dollars offshore without incurring U.S. tax.
These companies are advocating for the resurrection of the insurance tax-haven loophole–a provision that would weaken the American economy by reducing U.S. competitiveness and reinstituting a de facto regulatory scheme that hurts American businesses.
When the tax-haven loophole existed, foreign companies were not only permitted but incentivized to transfer their assets overseas to clear themselves of U.S. tax liabilities. The loophole created a crony mechanism that granted these companies a government-protected advantage over their American competitors. Several dozen U.S. companies moved overseas, in large part, because of the preferential treatment this provision gave their foreign competitors. Its elimination has already succeeded in bringing some of these companies back home.
Working families, startups, and other corporations were willing to abandon narrow loopholes for broader reform of lower rates and a simplified tax code. And it worked. The American economy is growing again.
We urge you to remain vigilant in opposing corporate cronyism.
Andrew Langer, Institute for Liberty
George Landrith, Frontiers of Freedom
Kevin Kearns, U.S. Business and Industry Council
Jerry Rogers, Capitol Allies
Judson Phillips, Tea Party Nation
Tom Zawistowski, We the People Convention
Seton Motley, Less Government
Chuck Muth, Citizen Outreach
Peter Ferrara, National Tax-Limitation Committee
Rick Manning, Americans for Limited Government
Ed Martin, Phyllis Schlafly Eagles
Letter Text here: Secretary Mnuchin Insurance Tax-Haven Loophole Letter