WOODBRIDGE, Va. - Democratic vice presidential candidate Joe Biden said Republican John McCain protected offshore tax shelters worth billions of dollars to U.S. insurance giants.
In his second trip in four days to this battleground state Tuesday, Biden said McCain promised to oppose any efforts to close a "Bermuda loophole" where American companies shielded $4 billion to $7 billion from U.S. taxes.
By claiming their headquarters as Bermuda, Biden said, firms actually based in the United States can keep profits out of the reach of the Internal Revenue Service.
"They're skipping out on billions of dollars in taxes, and that money could be used to insure our children, ... to make sure the (Veterans Administration) is not underfunded, to rebuild bridges that are crumbling around the nation," Biden said.
Biden was referring to a provision of tax law that some insurance companies can use to wipe out much of their U.S. tax liability. The companies that issue fire, property and casualty insurance are allowed to establish a Bermuda office and transfer the premiums they collect there, treating them as business expenses. That creates a deduction that erases millions of dollars in taxable profits, costing the U.S. Treasury $4 billion or more a year.
McCain spent three days in Bermuda in August 2007 meeting business and political leaders, and while there was quoted by the island's main newspaper, the Royal Gazette, as promising to defend tax breaks for insurance companies that locate there.
"The industry, the reinsurance that's had such phenomenal success has been good for both nations," McCain was quoted as saying in an Aug. 23, 2007 article. "I would oppose any measures that would upset that."
Biden's remarks echoed the claims Obama's campaign made in a new television ad it began running Tuesday attacking McCain on the nation's economic woes amid fears of a meltdown on Wall Street.......
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