Category Archives: tax reform

Coalition Letter to Secretary Mnuchin

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.

Respectfully,

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

Coalition Seeks to Undo Crony Insurance Tax-Loophole

news

Conservative Coalition Supports Senate Effort to Close “Bermuda Tax Triangle” Loophole and Protect American Jobs

Washington D.C. – On behalf of the following free-market groups and organizations, together representing Americans from coast to coast, we urge you to support the Senate’s Anti-Base Erosion Provision, which removes an unfair advantage favoring foreign insurers over U.S.-headquartered companies. Under current U.S. tax law, foreign based insurers are able to transfer profits to affiliates in offshore tax-havens tax free, but does not afford equal treatment to U.S. based insurers.

As a candidate for President, Donald Trump touched a nerve with voters by pointing out that our tax code is unfair to American companies and employees. One such unfair provision is the insurance tax-haven loophole, which has discriminated against the American insurance industry for over three decades. The proposed Senate tax bill removes the incentive that foreign companies currently exploit to shift thousands of American jobs overseas and avoid paying U.S. taxes. The federal government should never reward or encourage companies to make decisions at the expense of U.S. taxpayers and jobs.

The Senate tax bill includes strong anti-base erosion measures that will go a long way in stopping foreign companies from gaming the U.S. tax code. It is imperative that Congress resist any desperate attempts by foreign insurers to weaken the language thereby preserving their loophole.

Foreign insurance companies are using misleading talking points to prevent a level playing field for U.S. companies. While their inaccurate claims alleging reduced capital and increased prices confuse the public discussion, the bottom-line is they want to avoid paying U.S. taxes and continue gaming the system. The Senate bill would merely require foreign companies to pay U.S. taxes on their U.S. generated insurance business instead of allowing them to use offshore affiliates to strip earnings.

Preserving a loophole for foreign insurers undermines the very foundation of the tax reform effort being considered on Capitol Hill.

At a time when companies are inverting, and the American people are demanding action against corporate tax avoidance, it is long overdue that Congress close the loophole. We urge Congress to support the provision in the Senate bill.

Read the full letter HERE: Congress Must Undo Crony Insurance Tax-Loophole_Coalition Letter