MORE ON THE OFFSHORE TAX SCAM BY US COMPANIES

MORE ON THE OFFSHORE TAX SCAM BY US COMPANIES

Dozens of Companies Admit Using Tax Havens

May 19, 2014

American Fortune 500 corporations are likely saving about $550 billion by holding nearly $2 trillion of “permanently reinvested” profits offshore. Twenty-eight of these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.

While congressional hearings over the past few years have focused attention on the tax avoidance strategies of technology corporations like Apple and Microsoft, this report shows that a diverse array of companies are using offshore tax havens, including U.S. Steel, the pharmaceutical giant Eli Lilly, the apparel manufacturer Nike, the supermarket chain Safeway, the financial firm American Express, and banking giants Bank of America and Wells Fargo.

How We Know When Multinationals’ Offshore Cash is Largely in Tax Havens

Some American multinational corporations complain to members of Congress that their offshore profits would be taxed at the U.S. corporate income tax rate of 35 percent if those profits were subject to U.S. taxes. However, this can only be true if those profits are mostly held in tax havens — countries in which they are subject to little or no corporate tax.

Cash Abroad Rises $206 Billion as Apple to IBM Avoid Tax

By Richard Rubin Mar 12, 2014 
The largest U.S.-based companies added $206 billion to their stockpiles of offshore profits last year, parking earnings in low-tax countries until Congress gives them a reason not to. The multinational companies have accumulated $1.95 trillion outside the U.S., up 11.8 percent from a year earlier, according to securities filings from 307 corporations reviewed by Bloomberg News. Three U.S.-based companies --Microsoft Corp. (MSFT), Apple Inc. and International Business Machines Corp. -- added $37.5 billion, or 18.2 percent of the total increase.

“The loopholes in our tax code right now give such a big reward to companies that use gimmicks to make it look like they earn their profits offshore,” saidDan Smith, a tax and budget advocate at the U.S. Public Interest Research Group, which seeks to counteract corporate influence.