This series by Eric Shawn and Jonathan Serrie examines the substance of the president’s proposed corporate tax cut, the reasons some GOP senators are opposed to it, and the president’s claim that his plan will collect billions in federal revenue.
As part of his continuing efforts to raise awareness of tax reform, President Trump hosted a roundtable discussion Monday featuring executives from four major businesses and almost a dozen business leaders.
One area of concern for the president was international trade, but the spotlight was initially on the tax-reform-inspired leaks that have hit Canada in recent weeks. Trump included a line about the hacked documents, which includes National Security Adviser John Bolton’s purported recommendation that Canada charge Americans accused of offshore tax evasion. Here’s a look at the key details:
WHAT ARE PANDORA PAPERS?
The Organization for Economic Cooperation and Development (OECD) released a series of reports last year on corporate tax avoidance. One of those was the “Panda Papers,” which focus on tax havens and include documents from Apple and others, as well as an Australian Supreme Court judgment. It features details of the cooperation between Apple, the European Commission and the Finnish tax authorities on requests by Apple for tax credits.
The Canadian tax papers, like the rest of the OECD documents, outline the tax obligations of companies in major tax havens.
TRUMP CLAIMS AFFECTED COMPANIES ARE ‘GAGGING’ ON CORPORATE TAX REFORM
Part of the plan to improve taxes from a tax reform standpoint: offshore tax evasion. The president called attention to the Canadian government’s response to the previously leaked documents, which include a recommendation from Bolton that Canada file charges against Americans accused of tax evasion.
“There’s a lot of tax law that’s being changed right now, and some of the things that have happened with the recent leaks that happened in Canada to some of our firms is really a problem,” the president said at Monday’s meeting. “It is a very, very bad, very, very bad situation when we have so many companies gagging, being very, very big corporations and giving up so much capital to avoid tax.”
The Canada tax enforcement recommendation, like the ones for other major countries, is based on an assumption that the countries doing the enforcing have sufficient means to compel Americans to pay. Companies have paid large sums in multi-million dollar fines in jurisdictions like the United Kingdom. American citizens and companies pay taxes in all jurisdictions where they are legally residing.
CANADA: IRVINE INTAKES ‘SOME CREDIBLE EXPLANATIONS’
The Canadians, who feel some of the emails leak may have been politically motivated, claim the documents contain “some credible explanations.” They suggest the documents show “inappropriate communications” from the Canadian government to a company. But the rules as written have little bearing on whether it is reported. The OECD report says that while violations of the OECD letters of understanding may be pursued, the actions are “a matter for enforcement and/or prosecution under local laws of the company concerned.”
CALIFORNIA: BURKE DEPOSITS PERSONAL RESERVES IN AMNESTY EXCHANGE
California Rep. Darrell Issa, a Republican, has called for the White House to identify Americans with offshore accounts who aren’t being charged for offenses, arguing they may not be taking part in tax fraud. California Attorney General Xavier Becerra took issue with that demand, saying he wants to make them pay more taxes.
HENRY MORRIS: TRUMP LOAN NOT A TAX LOAN
Mark Green, the founder of Washington-based tax expert and philanthropist Henry Morris, took issue with the idea that President Trump’s $130,000 payment to Stormy Daniels was a tax-deductible personal loan — the definition for which is very specific.
BUSH NAMED ‘WORST MAN’ AGAIN
Former Florida Gov. Jeb Bush, who has criticized President Trump’s policies at almost every turn, has landed on Forbes’ list of the 100 most powerful people in the world.
The ranking, released last week, places the only current living president on the list at No. 5, and the grandson of former President George H.W. Bush No. 2. They all had a relatively slight drop from 2017. Last year, Donald Trump was No. 1, followed by actor and director Leonardo DiCaprio and Bush. The former president came in the same spot this year, while Trump took