Dem platform draft adopts Sanders proposal on taxing foreign earnings
A committee draft of the Democratic Party platform released Friday adopts a campaign proposal from Bernie Sanders to end U.S. corporations’ ability to defer taxation on foreign earnings.
“We will end deferrals so that American corporations pay U.S. taxes immediately on foreign profits and can no longer escape paying their fair share of United States taxes by stashing profits abroad,” the platform draft states.
As Sanders had proposed, the platform draft calls for using the revenue generated by the change to invest in infrastructure. Sanders has worked to influence the party platform as he continues his campaign despite Hillary Clinton effectively clinching the nomination.
Clinton has said she would pay for infrastructure investments through business tax reform, but she has not provided details about what business tax changes she would use to offset infrastructure spending.
Like Sanders, presumptive Republican presidential nominee Donald Trump also proposed ending deferral, though Trump would also slash the corporate tax rate from 35 percent to 15 percent.
Most Republicans, however, support moving to a territorial tax system, ending U.S. taxation on companies’ foreign earnings altogether. The tax-reform blueprint House Republicans released last week proposes moving to a territorial system.
Other tax proposals in the Democratic platform draft resemble proposals from Clinton, including clawing back tax breaks for companies that move jobs overseas and establishing a surtax on multimillionaires.
“At a time when we have seen near-record corporate profits, slow wage growth, and rising costs, we need to offer tax relief to middle-class families—not those at the top,” the platform draft states.
The platform draft states that Democrats support a tax to limit high-frequency trading and excessive speculation but acknowledges “that there is room within our party for a diversity of views on a broader financial transactions tax.” Clinton has proposed a tax on high-frequency trading, while Sanders has proposed a broader financial transactions tax.
The platform draft also calls for expanding the earned income tax credit and indexing the child tax credit to inflation. These tax credits benefit low- and middle-income workers.
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