Two Democratic lawmakers have introduced legislation in the House and Senate aimed at ensuring multinational companies pay the same tax rate on profits earned abroad as they do in the U.S., to counter some of the effects they claim from the Tax Cuts and Jobs Act that Republicans passed last December.

The bill, known as the No Tax Breaks for Outsourcing Act, was introduced Tuesday by Sen. Sheldon Whitehouse, D-R.I., and Rep. Lloyd Doggett, D-Texas.

The bill would equalize the tax rate on profits earned abroad to the tax rate on profits earned in the U.S. The new tax law allows companies to pay half of the statutory corporate tax rate on profits earned abroad, according to the lawmakers, and for many companies that rate could be practically nothing. The Whitehouse and Doggett bill would eliminate the deductions for “global intangible low-tax income” and “foreign-derived intangible income” under the new tax law.

“It is flat wrong that the corner pharmacy should have to pay a tax rate that is substantially higher on its operations than Pfizer does on its offshore operations,” said Doggett in a statement. “The No Tax Breaks for Outsourcing Act would treat both the same. It levels the playing field for small and domestic-oriented businesses by ending special tax breaks for offshore investments.”

The bill would also repeal the 10 percent tax exemption on profits earned from certain investments made overseas. In addition to the half-off tax rate on profits earned abroad, the new tax law completely exempts from taxation a 10 percent return on tangible investments made overseas, such as plants and equipment, according to the lawmakers. Their bill would eliminate the zero-tax rate on certain investments made overseas.

Whitehouse and Doggett’s bill would also treat “foreign” corporations that are managed and controlled in the U.S. as domestic corporations to address the of U.S. corporations nominally organizing in tax havens such as the Cayman Island. They pointed to Ugland House, a five-story building in the Cayman Island that functions as the legal home of over 18,000 companies, many of them actually U.S. companies. Their bill would treat corporations worth $50 million or more and managed and controlled within the U.S. as the U.S. entities they actually are, and subject them to the same tax as other U.S. taxpayers.

The bill would also crack down on corporate inversions by tightening the definition of “expatriated entity.” The bill would deem any merger between a U.S. company and a smaller foreign company to be a U.S. taxpayer, no matter where in the world the new company claims to be based. The combined company would continue to be treated as a domestic corporation if the historic shareholders of the U.S. company own more than 50 percent of the new entity. If the new entity is managed and controlled in the U.S. and still conducts significant business in the U.S., it would continue to be treated as a domestic company regardless of the percentage ownership.

Doggett and Whitehouse’s bill would also discourage earnings stripping by restricting the deduction for interest expense for multinational enterprises with excess domestic indebtedness. In addition, it would eliminate a tax break for foreign oil and gas extraction income.

“Our bill would prohibit multinational corporations from exploiting the loopholes opened by President Trump’s so-called ‘tax reform,’” said Whitehouse in a statement. “Those big corporations have profited long enough from special tax breaks—now we need a tax code that’s fair to small businesses and middle-class workers.”

This bill has been endorsed by a number of groups, including Americans for Tax Fairness. “It is critical to level the playing field so that U.S. workers and U.S. corporations are on an equal footing with the subsidiaries of U.S. corporations operating offshore,” said Frank Clemente, executive director of American for Tax Fairness in a statement. “Otherwise, corporations will game the system created by this new tax law and working families, communities and Main Street businesses will pay the price.”

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