The secret tax-dodging strategies of the global elite in China, Russia, Brazil, the U.K., and beyond were exposed in spectacular fashion by the recent Panama Papers investigation, fueling a worldwide demand for a crackdown on tax avoidance.
But there is little appetite in Congress for taking on powerful tax dodgers in the U.S., where the practice has become commonplace.
A request for comment about the Panama Papers to the two congressional committees charged with tax policy — House Ways and Means and the Senate Finance Committee — was ignored.
The reluctance by congressional leaders to tackle tax dodging is nothing new, especially given that some of the largest companies paying little to no federal taxes are among the biggest campaign contributors in the country. But there’s another reason to remain skeptical that Congress will move aggressively on tax avoidance: Former tax lobbyists now run the tax-writing committees.
We researched the backgrounds of the people who manage the day-to-day operations of both committees and found that a number of lobbyists who represented world-class tax avoiders now occupy top positions as committee staff. Many have stints in and out of government and the lobbying profession, a phenomenon known as the “reverse revolving door.” In other words, the lobbyists that help special interest groups and wealthy individuals minimize their tax bills are not only everywhere on K Street, they’re literally managing the bodies that create tax law:
A request for comment about the role of former lobbyists now working as staffers was also ignored by the committees.
Wealthy individuals and corporations routinely squirrel away vast sums of money in jurisdictions like Delaware or Wyoming to avoid taxation, a major factor in the current state of affairs that allows those at the top of the economic pyramid to pay an effective tax rate that is often lower than the middle class. Verizon, Boeing, and General Electric, to name a few, paid no federal income taxes in recent years, despite earning a hefty profit margin. The Tax Justice Network ranks the U.S. as the third most problematic tax haven country, a ranking even worse than Panama.