ABOVE PHOTO: The IRS won’t collect up to $600 billion from dozens of U.S. multinational corporations using offshore tax havens, according to a new report from Citizens for Tax Justice. This one building in the Cayman Islands serves as the home address for nearly 19,000 corporate “headquarters,” allowing the parent companies to shelter their profits. (Photo courtesy of U.S. PIRG.)
HARRISBURG, Pa. – Congressional hearings in the past few years made headlines exposing how Apple and Microsoft moved money overseas to avoid paying U.S. taxes.
But as a new report from Citizens for Tax Justice shows, these name-brand companies aren’t alone.
Matt Gardner, executive director of the Institute on Taxation and Public Policy, says companies known to use offshore tax havens include Nike, Safeway, American Express, Bank of America, Wells Fargo and the pharmaceutical giant Amgen. He says the impact on the U.S. Treasury is significant.
“If these companies paid the U.S. taxes that they ought to be paying on this income, we’d be talking about $600 billion,” he stresses.
At the end of 2014, 304 Fortune 500 companies collectively held more than $2 trillion in Bermuda, the Cayman Islands, the Bahamas and other tax havens – places that Gardner points out provide very little in the way of real business opportunities for American corporations such as Qualcomm, Safeway and Microsoft.
Gardner adds many corporations that fail to disclose whether their offshore holdings are tax havens are the same ones lobbying Congress to enact a temporary tax holiday, or a permanent exemption, for offshore income.
He says both proposals would only reward companies for shifting profits overseas, and predicts average Americans would end up footing the bill.
“When corporations don’t pay their fair share, really, the impact is that the rest of us – middle-income families and small businesses – pay more to make up the difference,” he points out.
The report recommends that Congress act sooner rather than later to put a stop to offshore tax havens.
Gardner says each of 77 companies in the survey increased its declared offshore cash by at least $500 million in the past year alone.
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