Senator Sherrod Brown, a Democrat from Ohio, has introduced a new bill that would force deserting corporations to pay taxes before they head overseas-The Pay What You Owe Before You Go Act of 2016. U.S. multinational corporations have been evading paying U.S. taxes by renouncing their corporate citizenship and formally becoming formal foreign corporations (though they often don't relocate any of their facilities)-a loophole that enables them to save billions. One example is Pfizer, the pharmaceutical corporation, which could avoid as much as $35 billion in taxes if these inversion loopholes are not closed.
Brown says his bill would prevent corporations "from sticking middle-class working people with their tab." He calls it a "commonsense step" to increasing domestic investment and leveling the playing field for all American companies. The long-term solution, he says, will be to pass international corporate tax reform.
This is not the first time Brown has introduced the bill; the first time was in 2014, co-sponsored by Richard Durbin, a Democrat from Illinois. Though corporate inversions are not a new problem, more attention has been paid to them in recent years, so this time around his bill could be more politically opportune.
Frank Clemente, the executive director of Americans for Tax Fairness calls Brown's bill "a victory for tax fairness."
