WASHINGTON - A proposal to stop rich Americans from stashing assets offshore to evade taxes, by slapping penalties on individuals and foreign financial institutions, was introduced on Tuesday in the U.S. Congress.
The bill, introduced by Senate and House Democratic leaders, would raise $8.5 billion over a decade by collecting taxes in previously secret accounts, lawmakers said.
Leaders of the key tax-writing panels in the Congress, Senate Finance Committee Chairman Max Baucus and House of Representatives Ways and Means Committee Chairman Charles Rangel, introduced the legislation with the backing of several other Democrats.
The United States has been cracking down on individuals that hide income offshore and the banks that help them. By one estimate, the United States loses $100 billion to offshore tax evasion annually.
At the center of the U.S. effort has been its legal case against UBS AG, which agreed to pay $780 million to settle a criminal lawsuit, and consented to eventually turning over 4,450 names of U.S. account holders.
Under the proposed bill, foreign banks would be forced to disclose information about American customers, or face a 30 percent tax on their income from U.S. financial assets.
The legislation would crack down on shell companies by requiring a foreign corporation to give the U.S. Treasury the names of Americans who own more than 10 percent of its shares.
Any American owning more than $50,000 in foreign assets would be required to declare accounts to the Treasury, and a 40 percent penalty would be imposed on understatements of foreign assets by American taxpayers.
To give tax authorities more time to go after tax cheats, it would extend the statute of limitations to six years, from current three years, for major tax evasion cases.
President Barack Obama praised the legislative effort.
A small number of individuals and businesses hide their assets overseas solely in order to shirk their responsibilities, even as the vast majority of hard-working Americans honor the obligations of citizenship and fulfill their responsibilities, he said in a statement.
(Reporting by Kim Dixon; Editing by Tim Dobbyn)