Kent Conrad: “Well, the Senator asked the witnesses before the committee. They seemed totally flummoxed by the question. It was pretty…”

“Well, the Senator asked the witnesses before the committee. They seemed totally flummoxed by the question. It was pretty amazing. Here we have this building in the Cayman Islands, this five-story building. We have got 12,748 companies that claim it as their home. Now, why did they do that? They do it because the Cayman Islands has no taxes. So guess what they do. They have subsidiaries in the United States that report no earnings in the United States. Then they sell to a subsidiary in the Cayman islands at a reduced price, and they show their profits in the Cayman Islands. When I was tax commissioner, I found this kind of tax abuse going on repeatedly. It was quite amazing. This was 20 years ago that companies were engaged in this kind of activity. It has absolutely exploded. That is what the Permanent Subcommittee on Investigations is telling us, that we are losing $100 billion a year to this kind of scam. Of course, the abusive tax shelters are on top of that. The tax gap, the difference between what is owed and what is paid, is on top of that. But when you ask the relevant officials: Have you audited these companies to see if they really are doing business out of this building? Well, you got sort of--they were sort of in a trance. They had no answer. I would say let's go after these people who are not paying what they owe legitimately and fairly in this country.”