The Senate Permanent Subcommittee on Investigations held a hearing on offshore profit shifting and the U.S. tax code, examining in particular the practices of Microsoft and Hewlett-Packard, while questioning an Ernst & Young tax partner who services HP.
“U.S. multinational corporations benefit from the security and stability of the U.S. economy, the productivity and expertise of U.S. workers and the strength of U.S. infrastructure to develop enormously profitable products here in the United States,” Sen. Carl Levin, D-Mich., said in his opening statement at Thursday’s hearing. “But, too often, to many of these corporations use complex structures, dubious transactions and legal fictions to shift the profits from those products overseas, avoiding the taxes that help support our security, stability and productivity. The share of federal tax revenue contributed by corporations has plummeted in recent decades. That places an additional burden on other taxpayers. The massive offshore profit shifting that is taking place today is doubly problematic in an era of dire fiscal crisis.”
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