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Headline should read Companies Comply With Tax Law
Top 500 US firms keep $2.1 trillion in tax havens, study finds
http://america.aljazeera.com/article...ns-abroad.html
New report suggests that overseas cash holdings mean US is losing out on an estimated $620 billion in tax revenue
October 6, 2015 2:45PM ET
by Tom Kutsch @tomkutsch
The largest 500 U.S. companies would owe an estimated $620 billion in U.S. taxes were it not for the more than $2.1 trillion in offshore cash that most of the firms hold in foreign tax havens, according to a study released Tuesday.
The report (PDF), based on an analysis of company filings to the IRS and the Securities and Exchange Commission, was authored by the Citizens for Tax Justice and the U.S. Public Interest Research Group Education Fund.
It found that close to three-quarters of the 500 biggest companies by gross revenue utilize tax havens through foreign subsidiaries in countries with low tax liability, including Bermuda, Ireland, the Netherlands and the Cayman Islands.
“Most of America’s largest corporations maintain subsidiaries in offshore tax havens,” the report said. “At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014.”
The study also found that in five of the commonly used tax haven countries — Bermuda, the Cayman Islands, British Virgin Island, Bahamas and Luxembourg — the reported profits of subsidiaries of U.S. companies were more than GDPs of the countries in which the firms were registered.
Apple is by far the largest holder of offshore money not subject to U.S. taxes, with $181.1 billion. If those profits were taxed at U.S. rates, the company would pay $59.2 billion.
General Electric and Microsoft hold $119 billion and $108.3 billion in offshore cash holdings, respectively, coming in at second and third on the list.
Apple has consistently defended itself against claims of tax-dodging. Responding to a New York Times article in 2012 on the topic, the tech giant said it "pays enormous amounts of taxes, which help our local, state and federal governments." In regards to deals between Apple and the Irish government, the firm has previously noted that it is bound by the same tax laws at other countries in the country.
Microsoft and General Electric have both argued in similar veins in recent years. In 2013, General Electric said it paid"billions of dollars in corporate income taxes to governments around the world, including U.S. federal income taxes, making it one of the highest payers of corporate income taxes."
In 2011, a spokesperson for Microsoft said the company "complies with the tax laws of every jurisdiction in which we do business."
Tuesday's study found that 30 of the top 500 companies accounted for 65 percent, or $1.4 trillion, of the total ac ulated profits.
Between 2008 and 2014, the study added, the amount of offshore cash holdings for American multinationals doubled.
"For many companies, increasing profits held offshore does not mean building factories abroad, selling more products to foreign customers, or doing any additional real business activity in other countries," the study said. "Instead, many companies use accounting tricks to disguise their profits as 'foreign,' and book them to a subsidiary in a tax haven to avoid taxes."
While not all companies voluntarily disclose how much they would pay in U.S. taxes if it were not for operating in foreign tax havens, the 57 that did, expected they would pay a combined $184.4 billion extra, meaning they were effectively paying on that money a 6 percent tax rate, far lower than the 35 percent corporate tax rate in the U.S.
“Congress has created loopholes in our tax code that allow offshore tax avoidance, which forces ordinary Americans to make up the difference,” the report said. “The practice of shifting corporate income to tax haven subsidiaries reduces federal revenue by an estimated $90 billion annually.”
Headline should read Companies Comply With Tax Law
... that they wrote.
I don't believe that companies are keeping these funds off shore to evade taxes. I have it on good authority that economic behavior is not influenced by tax policy.
Boutons so greedy pay your taxes on all that
but but but we have the highest corporate tax rate in the world
Progressives obsessed with OPM
Darrin an eager apologist for businesses not paying their fair share. You and I pay. Why should businesses be different?
The other concern is the cash hoarding. Those are 2 trillions parked somewhere, instead of being used for R&D, re-investment, company growth, etc, things that would make them part of the active economy...
Not only are they avoiding corporate taxes, a sizable proportion of this offshore money is invested in US government debt.
https://www.thebureauinvestigates.co...offshore-cash/
So not only are they saving billions in tax, the US taxpayer is paying them interest on those billions.
and the interest paid by US taxpayers to offshore funds is tax free.
America is ed and un able, because the 1%/BigFinance/BigCorp own and control govt to transfer wealth to themselves.
Any of y'all don't believe in un ability? Then tell us how to un America, step by step, how to "take our country back" from the oligarchy.
^^ Step 1 is to reform political campaign finance. The Citizens United decision gives donors with deep pockets unlimited ability to purchase our elected officials, so it doesn't really matter who wins the election - both sides are for sale to the highest bidder.
The only way to overturn the Supreme Court decision is via a Cons utional Amendment. This can happen either by getting a two-thirds majority in both houses of Congress or if two-thirds of the states call for a Cons utional convention. IMO Congress is too corrupt to make this happen, so getting 34+ state legislatures to call for a convention is a better option - state legislators aren't as beholden to big money as Congressmen are. Also the threat of a convention can cause Congress to act (e.g. Congress passed the 17th Amendment when it became clear that enough states would sign up). So while difficult, it's the more likely route.
This is one topic where most conservatives, liberals and moderates should find common ground. I don't think the average Republican or Democratic voter thinks unlimited money in politics is a good idea. It's just about getting this issue in the spotlight and building grassroots support.
State legislatures are way more corrupt than our federal ones even.
Some of them are rotten to the core, e.g. Kansas. But others aren't. 4 states (VT, CA, IL and NJ) have already passed bills calling for an Article V convention on campaign finance reform. 6 other states (CT, NH, HI - lower house and MD, MO, DE - upper house) have passed bills in one of the two state houses. Once 15+ states get this passed through both houses, the pressure will mount on the others.State legislatures are way more corrupt than our federal ones even.
not gonna happen,
Const amendment not gonna happen,
what the "average ... voter" thinks is irrelevant because they are disenfranchised. The politicians are proposed by, intimidated by, financed by, and controlled by the oligarchy of the 1% and BigCorp.
Voter suppression and insane gerrymandering has guaranteed Repugs non-compe ive districts and states where, if they aren't numerous enough in Congress to pass legislation, they are numerous enough to obstruct progress.
America is ed and un able.
Anybody else wanna try to un it, un us?
Last edited by boutons_deux; 10-07-2015 at 08:43 AM.
Absolutely.State legislatures are way more corrupt than our federal ones even.
Texas and Louisiana anyways.
Oops, I read post #14 and we are already assessing this.
Tax breaks and loopholes are supposed to create jobs, is what I've been told.
and btw, Repugs states are pushing to change electoral voting from winner=take-all to some perversion of proportional allocation.
also, the SCOTUS5 have a chance this session to approve the REPUG/VRWC suit that allows district populations to be defined by registered voters, or eligible voters, instead of all residents. The faux-originalists of the SCOTUS5 could very well re-interpret the Cons ion from "persons" to (registered) eligible voters.
the VRWC, BigCorp, 1% are relentlessly, aggressively ing America to un ability.
why?
to amass even more power and wealth to themselves, reducing, eliminating any countervailing power from the govt and from voters.
http://www.bloomberg.com/news/articl...g-billionairesLast year, about $450 million belonging to top executives at billionaire hedge fund manager John Paulson’s New York firm took a quick round trip to Bermuda.
In April, the executives sent the money to a reinsurance company that they’d set up on the island 650 miles off the North Carolina coast. By June, the Bermuda company, which has no employees and sells far less reinsurance than the industry norm, had sent all the cash back to New York, to be invested in Paulson & Co. funds.
By recycling the funds through Bermuda-based Pacre Ltd., the Paulson executives are positioned to legally exploit a little-known tax loophole, reduce their personal income taxes and delay paying the bill for years.
“These types of reinsurance companies are permitting U.S. taxpayers to defer -- indefinitely -- U.S. tax,” said David S. Miller, a tax lawyer at Cadwalader Wickersham & Taft LLP. For some, he said, it’s “an unjustified benefit.”
A decade after the U.S. Internal Revenue Service threatened to crack down on what it said were abuses by hedge-fund backed reinsurers, more high-profile money managers are setting up shop in tax havens. Paulson, SAC Capital Advisors LP’s Steven A. Cohen and Third Point LLC’s Daniel Loeb have started Bermuda reinsurance companies since 2011, following a similar Cayman Islands venture by Greenlight Capital Inc.’s David Einhorn.
Didn't the last tax repatriation holiday prove to do little to nothing for job creation?
Repugs, ing up the country as usual, let (mostly BigPharma) repatriate $300B+ at, IIRC, 5% tax with the understanding that the repatriators would "create jobs".
BigPharma received their lucre, then killed 40K jobs
this is ...only <5% of Scottish limited partnerships.
very cool and very legal. very cool thread.
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