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Title: Here’s How 72% of Fortune 500 Companies Use Congress to Avoid Paying Taxes, Sticking You With the Bill
Source:
Free Thought Project/U.S. PIRG
URL Source: http://thefreethoughtproject.com/75 ... axes-this/#hyAhjb39IydCAvcT.99
Published: Oct 7, 2015
Author: Andrew Emett
Post Date: 2015-10-07 10:37:54 by Deckard
Keywords: None
Views: 258
Unlike average Americans and small businesses, U.S.-based multinational corporations armed with legions of lobbyists have manipulated the law into allowing their Fortune 500 companies to operate under a completely different set of rules. With Congress allowing these corporations to set up offshore tax havens, a new study found that nearly 75% of the Fortune 500 avoid an estimated $90 billion in federal income taxes each year. On Tuesday, the U.S. PIRG (Public Interest Research Group) Education Fund and Citizens for Tax Justice released a scathing report accusing Fortune 500 companies of holding over $2.1 trillion in accumulated profits offshore to evade paying U.S. taxes. By registering subsidiaries in the Cayman Islands, U.S. companies utilize legal accounting tricks to make much of their U.S.-earned profits appear to be earned in the Caymans in order to pay no taxes on those profits. According to U.S. law, subsidiaries are not even required to have any physical presence in the Caymans, except for a post office box. At least 358 companies, nearly three-quarters of the Fortune 500, operate subsidiaries in offshore tax havens, including Bermuda, Ireland, Luxembourg, the Netherlands, and Switzerland. Although the profits are supposed to be trapped offshore, about 93% of the money that Microsoft has officially booked overseas is invested in U.S. assets, according to SEC filings. As of 2014, these 358 companies maintain at least 7,622 tax haven subsidiaries. If these corporations were to pay the full rate on those offshore profits, the report estimates that the U.S. Treasury could collect $620 billion. With Congress more concerned with extorting average Americans and small businesses, this rampant offshore tax dodging has left taxpayers paying higher taxes and cutting government programs as the federal debt increases. After receiving taxpayer bailouts in 2008, Bank of America, Citigroup, J.P. Morgan-Chase, Goldman Sachs, Wells Fargo, and Morgan Stanley disclosed a combined 412 subsidiaries in tax havens. With $181.1 billion booked offshore and notorious for inducing sweatshop suicides, Apple would owe $59.2 billion in U.S. taxes if these profits were not officially held offshore for tax purposes. By structuring two Irish subsidiaries to be tax residents of neither the U.S. nor Ireland, Apple does not pay tax to any government for their offshore profits. Faced with over 1,000 lawsuits accusing the company of selling Zoloft while secretly aware it could cause malformed hearts in newborns, Pfizer operates subsidiaries in 151 tax havens. As the world’s largest drug manufacturer, Pfizer officially holds $74 billion in profits offshore to avoid paying U.S. taxes. Between 2009 and 2010, Google increased the amount of cash it reported offshore from $7.7 billion to $47.4 billion. Between 2005 and 2014, Walmart’s offshore income has grown from $6.8 billion to $23.3 billion. Other Fortune 500 companies caught manipulating the U.S. tax code include American Express, Nike, PepsiCo, Merck, Dow Chemical, General Electric, and Microsoft. Although the authors of the study urge Congress to prevent corporations from using offshore tax havens by closing egregious loopholes and increasing transparency, that will not happen while these same Fortune 500 companies continue to fund their election campaigns and Super PACs. Due to the Supreme Court’s 2010 Citizens United decision, unlimited amounts of undisclosed dark money has flooded the political process drowning out the voices of average taxpayers. Until Congress grows a spine and repeals Citizens United, corporations will continue purchasing politicians while evading taxes with impunity. “When corporations dodge their taxes, the public ends up paying,” said Michelle Surka, program associate with U.S. PIRG Education Fund, in a statement. “The American multinationals that take advantage of tax havens use our roads, benefit from our education system and large consumer market, and enjoy the security we have here, but are ultimately taking a free ride at the expense of other taxpayers.” 
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