More than70 percent of Fortune 500 companies maintain subsidiaries in offshore tax havens as of 2013, according to “Offshore Shell Games,” a report released May 5 by the U.S.
More than70 percent of Fortune 500 companies maintainsubsidiaries in offshore tax havensas of 2013, according to “Offshore Shell Games,” a report released May 5 by the U.S. PIRG Education Fund and Citizens For Tax Justice, two left-leaning activist groups. These organizations reported almost $2 trillion in profits held offshore, with the 30 largest accounting for 62 percent, or $1.2 trillion.
“Our tax code is broken, and it’s hurting the public,” said Dan Smith, Tax and Budget advocate for the U.S. PIRG Education Fund and a co-author of the report. “We’ve made it too easy for American multinationals to dodge taxes by setting up shell companies in tax havens. We simply shouldn’t allow companies that use American roads, and benefit from America’s education system and large consumer market, to take a free ride at the expense of the rest of us.”
The U.S. has not made significant changes to its tax code since 1986, according to Reuters. As a result, there are a number of loopholes present that can be used by individuals, families and corporations. Large businesses regularly defend their tax practices as legal and in the best interest of shareholders. However, recent financial troubles experienced by major western governments and increasingly aggressive tax-minimization strategies have given rise to a backlash of public opinion.
“The loopholes in America’s corporate tax have grown so outrageous that our policymakers should be embarrassed,” said Steve Wamhoff, CTJ legislative director. “The data in this report demonstrate that a huge portion of the supposedly ‘offshore’ profits are likely to be U.S. profits that are manipulated so that they appear to be earned in countries like Bermuda or the Cayman Islands where they won’t be taxed. Policymakers should close the loopholes that make this manipulation possible.”
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