RTWed, 07 Oct 2015 04:32 UTC
© www.telegraph.co.ukThe question is...(c'mon say it with me)...Where's the Money?
The top 500 US companies retained $620 billion that would have otherwise been taxed and spent by the government by using
overseas bank accounts, according to a report from Citizens for Tax Justice and the US Public Interest Research Group Education Fund.
"At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014," the report
states. In total, the 500 companies keep about $2.1 trillion in tax havens outside the US, most often in
Bermuda or the Cayman Islands.
So-called "offshore" profits often don't leave the US economy, however. The money is still circulating within America, just under the name of a registered foreign subsidiary of a US company. The report's conclusion is that the real problem lies in too many loopholes resulting in too little government revenue."There are clear policy solutions that lawmakers can enact to crack down on tax haven abuse. They should
end the incentives for companies to shift profits offshore,
close the most egregious offshore loopholes and increase transparency," the report recommends.
A bipartisan bill in Congress would
lower the corporate tax rate from 35 percent to 6.75 percent for a five-year period, enticing companies to return their funds from the tax havens. Senators Barbara Boxer (D-California) and Rand Paul (R-Kentucky) are co-sponsors of the
Invest in Transportation Act of 2015, which would send the taxes collected to the
Highway Trust Fund.
The bill, which was introduced in January, hasn't passed the Senate though, amidst skepticism that, as a "tax holiday," it would constitute irresponsible budgeting, and President Obama isn't expected to support a tax cut on large corporations.
Robert McIntyre, director of Citizens for Tax Justice, also balked at the idea, telling the Hill, "Incredibly, Congress is considering pouring salt on the wound by
giving companies a special low tax rate to 'repatriate' profits that, in many cases, are likely already here."However, a study by the New Democrat Network said the bill
could add $68.9 billion to the Highway Trust Fund.
Comment: According to the report, $90B in taxes are avoided each year by offshore accounts and a narrow segment of businesses are those that benefit. 30 companies with the most money officially book offshore for tax purposes, collectively operating 1,225 tax haven subsidiaries. And, the American public gets another whammy when they farm jobs overseas to pay lower wages and reap bigger profits by charging high end for the product in the States. It is a squeeze play on the economy at the expense of the public-at-large.
America’s largest companies collectively hold $2.1 trillion in offshore tax havens, allowing them to avoid some $90 billion in taxes per year, says a new study.
Seventy-two per cent of companies listed on the Fortune 500 operated subsidiaries in known tax havens as of the end of 2014, said the report from Citizens for Tax Justice and the Public Interest Research Group Education Fund.
The survey found Apple to be the largest user of tax havens among Fortune 500 companies, booking $181.1 billion offshore. It estimates Apple would owe $59.2 billion in taxes if this money had been booked in the U.S.
Apple’s tax practices have been a source of controversy. The U.S. Senate investigated the company in 2013, finding it had set up subsidiaries in Ireland that were tax residents of neither the U.S. nor Ireland.
“This arrangement ensures that they pay no tax to any government on the lion’s share of their offshore profits,” the study says.
Ireland has since moved to close that loophole.....continued
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