A new Citizens for Tax Justice / US PIRG study of IRS/SEC filings indicates that 358 of the 500 largest companies in the United States are stashing $2.1 trillion in legal tax havens.
The lost U.S. tax revenue from just 57 of them who admitted the difference in what they would have paid on those profits without havens versus what they actually paid (legally!) was $184.4 billion in total. The report then extrapolates that the lost U.S. tax revenue from the full Fortune 500 due to offshore tax avoidance may be around $620 billion total, or $90 billion yearly over the period in which the untaxed offshore stash was earned.
The tax haven countries themselves often have yearly GDPs smaller than the profits supposedly being “earned” in those countries by the “subsidiaries” of US megacorporations “based” in those countries.
Between 2008 and 2014, the study added, the amount of offshore cash holdings for American multinationals doubled.
Ah, I guess big U.S. firms can’t hire more people or pay better wages (duly earned through higher productivity!) because they “only” have over $2 Trillion in offshore savings. You see, it’s very tough as American megacorporations to pay living wages when you’re collectively only avoiding $90 billion a year in taxes.
Meanwhile, a major Democratic Party candidate for president wants to give tax breaks to big firms to pay workers more fairly, even though they already legally skip $90 billion annually in taxes now.
This is ludicrous. You don’t pay companies to do things they need to do anyway. You really don’t do it when they’re effectively stealing tax revenue now. As the head of the World Bank just said, legal tax avoidance schemes are a form of corruption. This needs to end. It just does.