Legislation Closes Offshore Corporate Tax Loophole to Ensure Veterans Receive Full Military Retirement Benefits
Washington D.C. – U.S. Senator Tammy Baldwin has cosponsored the Military Retirement Restoration Act to safeguard military retirees from changes to cost of living adjustments (COLA) that were included in the bipartisan budget agreement the Senate passed before the end of the year. The legislation would eliminate a tax loophole for offshore corporations in order to restore funding for military retirement benefits to veterans under the age of 62.
“This is a common sense measure built on the idea that everyone needs to pay their fair share. By closing this one corporate tax loophole, we can ensure our military veterans receive the benefits they’ve earned and deserve,” Baldwin said.
The Military Retirement Restoration Act, introduced by Senator Jeanne Shaheen (D-NH), repeals the provision in the Bipartisan Budget Act (Section 403) that cuts benefits for military retirees, including disabled veterans who are eligible for retirement benefits, by reducing the COLA for working-age military retirees by 1 percent starting in December 2015. The proposed change is projected to reduce funding for military retirees by $6 billion.
The legislation Senator Baldwin is cosponsoring would restore military retirement benefit funding to veterans, including disabled veterans, by stopping companies incorporated offshore, but managed and controlled in the United States, from claiming foreign status which helps them avoid paying U.S. taxes. Instead, they would be treated as U.S. domestic corporations for tax purposes. This provision is identical to Section 103 of the Stop Tax Haven Abuse Act and is expected to raise over $6.6 billion over 10 years.