(U.S. PIRG): With only one day’s notice to the public, the Senate Committee on Finance approved a package of tax “extenders” that included two provisions that will force taxpayers to pick up a $12.7 billion tab over the next two years by reinstating expired loopholes and tax preferences that allow some multinational companies to shift income offshore and avoid U.S. taxes. “They justified today’s vote as providing businesses with ‘certainty,’ but the Committee could have created equal certainty by ending these expensive giveaways,” said Phineas Baxandall, a Senior Analyst with the US Public Interest Research Group. “Not extending those provisions would also level the playing field for businesses that can’t use high-priced tax lawyers and offshore subsidiaries to dodge their taxes,” he added.

The Committee retroactively extended two tax provisions known as the “active financing exception” that will add $11.2 billion to the deficit and the “controlled foreign corporation (‘CFC’) look-through rule” that will cost $1.5 billion, according to estimates by the Senate Joint Tax Committee. Temporarily inserted into the tax code years ago and extended ever since, the two measures had expired at the end of 2011. Each rule make it easier for multinational companies to stash their U.S. earnings offshore and avoid paying tax on them. General Electric, Pfizer, Apple, Google and J.P. Morgan Chase are some prominent companies that have used these loopholes in the past.
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