Clinton Targets ‘Earnings Stripping’ by Corporate Tax Avoiders

Former Secretary of State Hillary Clinton laid out some of her corporate tax reform plan yesterday, with a focus on stopping corporate inversions and “earnings stripping.” From Bloomberg:

Clinton Targets 'Earnings Stripping' by Corporate Tax Avoiders

Democratic presidential candidate Hillary Clinton on Wednesday urged Congress to take action against companies that avoid taxes by shifting their debt to American soil while moving profit overseas, a technique known as earnings stripping, and said that if they don’t, the Treasury Department should crack down with new rules.

Clinton’s call for action on earnings stripping is part of her broader plan, unveiled Wednesday in Iowa, to stop corporate inversions—the practice of moving a company's tax address by merging with a foreign company—and other corporate strategies for shifting profits overseas to avoid U.S. corporate income taxes.

She is also urging lawmakers to pass an “exit tax” aimed at penalizing U.S. companies that move their tax addresses offshore. Clinton has also called for Congress to raise the threshold of shares that a U.S. company must sell to foreign shareholders in order to shift its tax address overseas from 20 percent to 50 percent.

The full article from Bloomberg is available here, while the Clinton campaign describes the policy details on its site.