Monday, July 19, 2004

Bmda: Ban on offshore contracts to hit Bermuda

WASHINGTON (Bloomberg) – Companies located in overseas tax havens, such as Ingersoll-Rand Co. and Weatherford International Ltd., would be denied Export-Import Bank loans under legislation passed by the US House of Representatives.The House voted 270-132 on Friday to add the amendment to an annual foreign aid bill. The provision prohibits the government- backed Export-Import Bank from approving loans or loan guarantees to companies that incorporated outside the US for tax purposes. The Senate has yet to act on the bill.

“They don’t want to pay taxes in America. Not them. That’s for the suckers of this country,” said Representative Bernie Sanders, a Vermont independent who sponsored the amendment.

The vote marks the second time this election year that House lawmakers have taken aim at companies that moved their headquarters to Bermuda and other low-tax jurisdictions. The House, over objections from the Bush administration, approved legislation last month that bars such companies from competing for homeland security contracts.

The flap over homeland security contracts was fuelled by the June 1 announcement that Bermuda-based Accenture Ltd. won a $10 billion contract to build a programme to collect data on foreigners entering the US. The House voted to preserve that contract, and the provision on future bidding may be stripped from a final bill during talks with the Senate.
Peter Saba, chief operating officer at the Export-Import Bank, said the loan provision would cost American jobs.

“This amendment would cause a loss of jobs here in the United States,” Saba said. “If there are issues with the offshore incorporation of companies or their parents, those issues should be addressed directly in other relevant legislation.”

Other companies that may be affected are Bermuda-registered Nabors Industries Ltd., the world’s largest onshore oil and natural-gas driller; Schlumberger Ltd., the world’s second-largest oilfield-services provider, and offshore driller Noble Corp.
Note who's pushing the bill, socialist Bernie Sanders. Democrats are amazing, they want to tax businesses to death and then they object when businesses do what they can to keep some of the money they make. The way to keep American jobs in America is to keep the tax burden low. However, Democrats believe that people like to pay taxes and that the money a corporation or an individual earns belongs to the state.

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