Mark Cuban, the billionaire investor and owner of the Dallas Mavericks basketball team, took to Twitter on Friday to rail against companies that adopt overseas addresses to avoid paying U.S. taxes. He urged investors to sell shares of those companies.
Cuban, who expanded on his remarks in a CNBC interview, echoed comments by President Barack Obama, who yesterday said the practice, while legal, is ethically wrong. By avoiding taxes, Cuban said companies create an unfair burden by requiring the government to collect more money from everyone else.
"At some point the owners of the company, the shareholders have to act like owners and take some responsibility,'' Cuban said in one post.
When companies move off shore to save on taxes, you and I make up the tax shortfall elsewhere sell those stocks and they won't move— Mark Cuban (@mcuban) July 25, 2014
Obama is stepping up pressure on Congress to close loopholes that allow companies to lower their tax bill. After years of seeking to end or reduce subsidies for energy companies and others, Obama is now criticizing U.S. companies for acquiring small Irish firms for Ireland's lower tax rate.
U.S. taxes companies at 35% compared with 12.5% for Ireland. U.K. and Switzerland companies are also buying Irish companies for the lower tax rate, The Independent newspaper in Dublin reported on Friday.
"I don't care if it's legal, it's wrong,” Obama said in a CNBC interview on Thursday, before making an address at Los Angeles Trade-Technical College, a center for vocational training. “It sticks you for the tab to make up for what they're stashing offshore."
"If you simply acquire a company in Ireland or some other country to take advantage of the low tax rate, you start saying we are now magically an Irish company despite the fact that you may only have a hundred employees there and you've got 10,000 in the United States; you are just gaming the system," Obama told CNBC. "You are an American company, you continue to benefit in all kinds of ways from being an American company.”
Cuban said he doesn't believe Congress will be able to close loopholes. That's why he said he's advocating for a market response.
"That's a difficult battle," Cuban told CNBC. "Given the current situation, it's nearly impossible."
@jdenny27 easy to say hard to do. Better solution is to reduce all the non tax costs of doing business— Mark Cuban (@mcuban) July 25, 2014
If nothing changes and the tax exodus decreases the amount of revenue the government collects, Cuban said he believes the extra burden and higher costs will be shouldered by small businesses, start-ups and individuals.
"The costs don't leave the system," Cuban said. "There are X tens of millions of taxes that were paid last year that won't be paid next year and somebody has to pay that."
If I own stock in your company and you move offshore for tax reasons I'm selling your stock. There are enough investment choices here— Mark Cuban (@mcuban) July 25, 2014