Preserves benefits by closing corporate tax loophole Amendment filed to unemployment insurance legislation

January 08, 2014

(Washington, DC) – U.S. Senator Jeanne Shaheen (D-NH) today filed an amendment to emergency unemployment legislation to protect military retirees from changes to cost of living adjustments (COLA) that were passed in a bipartisan budget agreement.  Shaheen’s amendment mirrors legislation she introduced in December, the Military Retirement Restoration Act, and replaces the estimated $6 billion in savings from military retiree COLA with an estimated $6.6 billion raised by eliminating a tax loophole for offshore corporations.

Shaheen’s amendment was cosponsored by Senators Brian Schatz (D-HI), Mazie Hirono (D-HI), Richard Blumenthal (D-CT), Mark Warner (D-VA), Tom Udall (D-NM), Chris Coons (D-DE), Mark Begich (D-AK), Mary Landrieu (D-LA), Tammy Baldwin (D-WI), Tim Kaine (D-VA), Al Franken (D-MN), and Jeff Merkley (D-OR). 

“My plan represents a common-sense approach to restore the cost of living adjustments for future military retirees,” said Shaheen.  “I hope we can get a vote on this amendment as we’re considering an extension of emergency unemployment insurance.” 

“I supported the bipartisan budget agreement we passed last year because it will help create economic certainty for our small businesses, promote job creation, and protect us from another government shutdown that can wreak havoc on our economy. But I also knew it wasn’t perfect which is why I’m proposing a smart fix to one of its flaws.  I hope that we can generate bipartisan support for my plan.” 

Currently, companies that are incorporated offshore but managed and controlled from the United States can claim foreign status which helps them avoid paying U.S. taxes. Shaheen’s legislation would eliminate the tax loophole that allows those corporations to avoid paying their fair share of taxes.

In December, Shaheen spoke on the Senate floor about her legislation and suggested that “most Americans would agree that this kind of tax avoidance is unfair and that we should close this tax loophole rather than reducing military retiree benefits.”