CNN "The Lead with Jake Tapper" - Transcript: Inversions

Interview

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APPER: Joe Johns, thank you so much.

So what, if anything, will Congress do to stop corporations from exploiting this legal loophole to lower their tax bills? Joining me now to discuss it is Vermont's independent, Senator Bernie Sanders.

Senator Sanders, thanks for joining us. You've been an outspoken critic of these kind of uses, exploitation, whatever you want to call it of the tax code for years. So have many other Democrats in Congress. But I guess the big question is, why has nothing been done to stop this from happening?

SEN. BERNIE SANDERS (I), VERMONT: Well, I will give cut short and simple answer is that we have a major political party called the Republican Party, who the apparently see their goal in life is to represent the wealthy and the powerful and make sure that the rich and large corporations pay as little in taxes as possible.

That's the struggle we're having. But to my mind, not only is this tax inversion an outrage, we are losing now about $100 billion in federal revenue every year. Many of these large corporations are putting their money into the Kaman Islands and Bermuda and other tax havens. One out of four large profitable corporations today, Jake, pays zero in federal income tax. We need real tax reform that asks the wealthy and large profitable corporations to start paying their fair share of taxes.

TAPPER: Are there the votes in the Democratic Party in the Senate to the do major tax reform that would do away with this loophole?

SANDERS: There are over 50 votes, but I don't believe we'll have 60 votes to overcome a Republican filibuster.

TAPPER: So business advocates argue that one of the reasons this happens is that the corporate tax rate in the U.S. is one of the highest in the world and that is what is driving companies to go to other countries. What do you make of that?

SANDERS: What they often talk about is the nominal rate, the rate that is on paper which is 35 percent. According to the last GAO report, done in 2010, it should be updated, the effective corporate tax rate is 12.6 percent, not 35 percent.

They're virtually corporations that pay the top rate. As I mentioned a moment ago, one out of four major profitable corporations pays nothing in federal taxes and in a given year, you have companies like General Electric or Boeing that not only pays nothing in taxes, they get a federal rebate.

Jake, here's another important point. In 1952, corporations contributed about 32 percent of the tax revenue of the federal government. Today, that number is less than 10 percent.

So when you wonder why we have a large deficit and a large national debt, one of the reasons is that the federal is that corporate tax revenues and the percentage of revenues that are coming into the federal government is much, much lower than it used to be.

TAPPER: You know, according to the Congressional Research Service, these tax inversions have been on the rise dramatically between 1983 and 2003. There were only 29. That number jumped to 47 in the following ten years. Why do you think this is gaining momentum?

SANDERS: Well, I'll tell you why. I mean, and I think where the American people are really, really angry is you know, we have families that are sending kids off to war, these kids get killed. They come home wounded.

And then you have corporations and we're seeing now corporate profits at an all-time high. Many of these corporations have absolutely no loyalty to the people of the United States or to our government. If they can make an extra buck by moving to the United Kingdom, their headquarters for the United Kingdom paying less in taxes that is what they will do.

The danger as you've indicated is once one company starts doing it or many companies do it, other companies from a competitive perspective feel they have to do it, as well. When you see that kind of exodus or mass bolting out of the country for lower taxes, it is going to mean a sharp reduction in federal revenue, which means that the middle class pays more. We simply don't have the money to provide education or health care or infrastructure to the American people.

TAPPER: Senator Bernie Sanders, independent of Vermont. Thank you so much, sir.

SANDERS: Thank you.

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