Clarke Also Calls for Hearings on Phila. Police Dept. Gun Violence Prevention Efforts
Philadelphia, March 10, 2016 – City Council President Darrell L. Clarke (5th District) on Thursday proposed legislation that would bar the City of Philadelphia from entering into contracts with companies that hide overseas to avoid paying U.S. taxes.
The practice of “tax inversion” is a tax avoidance strategy whereby a U.S. company becomes a subsidiary of a new parent company in a foreign country for the purpose of falling under the foreign nation’s beneficial tax laws, usually by acquiring or merging with a smaller foreign company. These companies are legally permitted to maintain their majority ownership, management, and even physical headquarters in the United States. In addition, companies that enjoy the benefits of tax inversion often exploit interest deductions intended for truly foreign companies that do business in the United States.
“These tax avoidance schemes are unpatriotic, and are another example of how wealthy corporate interests manipulate the tax system to benefit themselves at the expense of their own nation,” Council President Clarke said. “Tax inversions are unfair to hardworking Americans who pay their taxes every year and to businesses that pay every quarter. Companies that exploit this loophole should not further benefit through public works projects funded by taxpayers.”
In February, the Obama Administration called on Congress to close the tax inversion loophole even if an expected business tax code overhaul is not completed this year. According to data compiled by Bloomberg News, approximately 51 U.S. companies have taken advantage of tax inversions since 1982, at least three of them based in Pennsylvania. Companies continue to exploit the tax inversion loophole despite restrictions passed by Congress in 2004.
Also on Thursday, Council President Clarke called for the Committee on Public Safety to hold hearings on the efficacy of the Philadelphia Police Department video surveillance system and crime prevention tools such as the ShotSpotter gunfire detection system. In 2015, Clarke met with officials in Camden County, N.J., where the implementation of ShotSpotter led to a 48-percent drop in reported gunfire in one year.
Council President Darrell L. Clarke is serving his second term as the President of Philadelphia City Council. He represents Philadelphia’s 5th Council District. More information at phlcouncil.com/DarrellClarke
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