October, 04 2016, 12:00pm EDT
For Immediate Release
Contact:
Michelle Surka Advocate, US Public Interest Research Group 617-747-4386Â
Jenice Robinson Institute on Taxation and Economic Policy 202-299-1066 x 29
Study: 73% of Fortune 500 Companies Used Tax Havens in 2015
$2.5 Trillion in Offshore Profits, Worth $717.8 Billion in Federal Taxes
WASHINGTON
In 2015, more than 73 percent of Fortune 500 companies maintained subsidiaries in offshore tax havens, according to "Offshore Shell Games," released today by the U.S. PIRG Education Fund, Citizens for Tax Justice and the Institute on Taxation and Economic Policy. Collectively, multinationals reported booking $2.5 trillion offshore, with just 30 companies accounting for 66 percent of this total. By indefinitely stashing profits in offshore tax havens, corporations are avoiding up to $717.8 billion in U.S. taxes.
"Corporate tax dodging may be legal, but it's certainly not good for everyday taxpayers and responsible small businesses," said Michelle Surka, advocate with U.S. Public Interest Research Group. "It disadvantages small businesses that don't have scores of tax lawyers, creates an economic environment that favors accounting tricks over innovation and real productivity, and forces the rest of us to foot the bill. We're beginning to see a growing international interest in cracking down on corporate tax dodging, and with $717.8 billion on the line, it's time for the U.S. to start doing the same."
"Every year, corporations collectively report that they have tens of billion more in cash stashed offshore than they did the year before, " said Matthew Gardner of the Institute on Taxation and Economic Policy. "The hard fact is that the U.S. tax code incentivizes tax haven abuse by allowing companies to indefinitely defer taxes on offshore profits until they are 'repatriated.' The only way to end this kind of tax avoidance is by closing the loopholes in the tax code that enable it."
Key findings of the report:
- 367 Fortune 500 companies collectively maintain 10,366 tax haven subsidiaries. The 30 companies with the most money booked offshore for tax purposes collectively operate 2,509 tax haven subsidiaries.
- 58 percent of companies with any tax haven subsidiaries registered at least one in Bermuda or the Cayman Islands, countries with no corporate tax. The profits that American multinationals collectively claim to earn in these island nations totals 1,884 percent and 1,313 percent, respectively of each country's entire yearly economic output, an impossible feat.
- The 30 companies with the most money booked offshore for tax purposes collectively hold nearly $1.65 trillion overseas. That is 66 percent of the nearly $2.5 trillion that Fortune 500 companies together report holding offshore.
- Only 58 Fortune 500 companies disclose what they would expect to pay in U.S. taxes if these profits were not officially booked offshore.In total, these 58 companies would owe $212 billion in additional federal taxes, equal to the entire state budgets of California, Virginia, and Indiana combined. The average tax rate the 58 companies currently pay to other countries on this income is a mere 6.2 percent, implying that most of it is booked to tax havens.
The study highlights the following companies:
- Apple: Apple has booked $214.9 billion offshore -- more than any other company. It would owe $65.4 billion in U.S. taxes if these profits were not officially held offshore for tax purposes. A recent ruling by the European Commission found that Apple used a tax haven structure in Ireland to pay a rate of just 0.005 percent on its European profits in 2014, and has required that the company pay $14.5 billion in back taxes to Ireland, where the company was paying significantly less than even the tax haven's standard low tax rate. A U.S. Senate investigation in 2013 uncovered Apple's two Irish subsidiaries that were tax residents of neither the United States, where they are managed and controlled, nor Ireland, where they are incorporated.
- Nike: The sneaker giant officially holds $10.7 billion offshore for tax purposes on which it would owe $3.6 billion in U.S. taxes. This implies Nike pays a mere 1.4 percent tax rate to foreign governments on those offshore profits, indicating that nearly all of the money is officially held by subsidiaries in tax havens. The shoe company, which operates 931 retail stores throughout the world, does not operate one in Bermuda.
- Goldman Sachsreports having987 subsidiaries inoffshore tax havens, 537 of which are in Bermuda despite not operating a single legitimate office in that country, according to its own website. The bank officially holds $28.6 billion offshore.
The report concludes that to end tax haven abuse, Congress should end incentives for companies to shift profits offshore, close the most egregious offshore loopholes, strengthen tax enforcement, and increase transparency.
"Offshore Shell Games" is available for download at: LINK
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.
LATEST NEWS
Indigenous Brazilians Mobilize for Land Demarcation, Tribal Rights
Participants in the 20th Free Land Camp demanded that leftist Brazilian President Luiz Inácio Lula da Silva deliver on his promises to Indigenous people.
Apr 26, 2024
Thousands of people rallied this week in BrasÃlia for the 20th annual Free Land Camp—the largest gathering of Indigenous people in Brazil—where participants demanded that President Luiz Inácio Lula da Silva's administration safeguard their lands and cultural rights
Organized by the Association of Brazil's Indigenous Peoples (APIB), the five-day Free Land Camp—in Portuguese, Acampamento Terra Livre (ATL)—wrapped up Friday after a week of solidarity and action. Activities included rallies and marches; events commemorating slain Indigenous activists; and plenary sessions on the climate emergency, education, mental health, and more.
Some participants criticized Lula—who was notably absent from this year's ATL after attending the previous two camps—for what they said was his failure to fulfill campaign promises to Indigenous Brazilians—although attendees also acknowledged that his administration has taken major steps toward tackling illegal resource extraction and demarcating tribal lands.
Two big issues at this year's ATL—whose theme was "Our Existence is Ancestral: We Have Always Been Here!"—were the demarcation of Indigenous lands and opposition to proposed Amazon megaprojects, especially the plan to build the EF-170 railway through the heart of the imperiled rainforest in order to boost mining, logging, agribusiness, and other resource extraction and exploitation.
Last year, Brazilian lawmakers overruled Lula's partial veto of the highly contentious "Marco Temporal" law, which effectively paused demarcations and potentially opened more Indigenous lands to exploitation.
Demarcation confers legal protections against the illegal logging, mining, and ranching that have plagued rural Brazil for generations. On April 19—Indigenous Peoples Day in Brazil—Lula touted his government's demarcation of Aldeia Velha, land of the Pataxó people, in the northeastern state of Bahia, as well as the territory of the Karajá people in Cacique Fontoura, Mato Grosso.
Lula has acknowledged that his administration is falling short of its own demarcation pledges to Indigenous people and has promised to do more.
Alessandra Korap Munduruku, a member of the Munduruku people and a 2023 winner of the prestigious Goldman Environmental Prize, criticized the demarcation delay.
"Twenty years of resistance struggle by the Terra Livre camp. For 20 years we've been coming to BrasÃlia, occupying and seeking our rights," she said. "This year, we're waiting for the government to demarcate all our lands. But the government is letting the [state] governors decide for us."
"This is not what we expect. It's not the governor's decision to make. It's the federal government's," Korap Munduruku added. "This is written in the Constitution, and we see that we are being used."
Brazilian and international agribusiness interests, including commodity traders like U.S.-based Cargill, are pushing Lula's administration to proceed with EF-170—commonly called the Ferrogrão—over the objections of Indigenous peoples. Kayapó leader Doto Takak-Ire warned last year that the Ferrogrão threatens the survival of no less than 48 native peoples, calling the project "the railway of Indigenous genocide."
Earlier this year, Brazilian Transport Minister Renan Filho said that building the Ferrogrão is a top administration priority, sparking widespread disappointment and anger among the Kayapó and other Indigenous people who say they'll be adversely affected by the railway.
ATL participants on Thursday led a "train of death" through BrasÃlia's Esplanade of Ministries, a greenway bisecting numerous government buildings, to draw attention to the project's perils.
"Ferrogrão is the train of death, of deforestation," Korap Munduruku said Thursday.
"The railroad is not going to carry people, as they claim, but grain production of international companies that are financing this project," she continued. "It's a project that will affect not only Indigenous people, but also traditional communities and the people who live in the towns alongside its route."
"In addition, it is a project that will affect people all over the world because it would exacerbate climate change with the massive deforestation it would cause," Korap Munduruku added.
APIB executive coordinator Kleber Karipuna said the government did not adequately consult Indigenous peoples when planning the Ferrogrão.
"Hearings have only been held in cities, none in Indigenous villages," the Karipuna tribal leader said. "Once again, we demand that the protocols for consulting Indigenous peoples be respected. Additionally, the absence of a consultation protocol should not be used as an excuse to deny consultation of peoples affected by the project."
Takakpe Tapayuna Metuktire of the Raoni Institute, which promotes Indigenous rights and sustainability, warned that "Ferrogrão represents the death of kilometers and kilometers of forest."
"While we should be thinking about how to preserve what remains and think about alternative infrastructure projects that respect our rights, nature, and Indigenous and traditional peoples," Tapayuna Metuktire asserted. "We are fighting to prevent yet another project of death and destruction from prevailing in the Amazon. With Ferrogrão all that will be left is scorched earth."
Keep ReadingShow Less
UN Warns of 'Catastrophic' Imminent Escalation in Sudan
Warring factions in North Darfur state must "avoid locating military installations within or near densely populated areas, including towns and camps for internally displaced people," said one U.N. official.
Apr 26, 2024
The United Nations' top humanitarian affairs officials on Friday called for an immediate deescalation of hostilities in Sudan, where rival factions in the military government have been fighting for a year and where an attack on the city of El Fasher is reportedly imminent.
About 800,000 people in the city, the capital of North Darfur state, are in "extreme and immediate danger," U.N. aid operations director, Edem Wosornu, told the U.N. Security Council earlier this week, as she reported that clashes between the Rapid Support Forces (RSF), a paramilitary group, and the Sudanese Armed Forces (SAF) are nearing El Fasher.
Fighting between the two groups has intensified in recent weeks, forcibly displacing an estimated 40,000 people.
The U.N. Office for the Coordination of Humanitarian Affairs said Friday that the security situation in North Darfur has left more than a dozen aid trucks with relief supplies for 122,000 people stranded in neighboring Northern state, unable to proceed into the only capital city in Darfur that is not controlled by RSF.
"A patchwork of armed actors, including the Darfur Joint Protection Forces, the SAF, and the RSF control different parts of the El Fasher area," Human Rights Watch reported this week. "Tense calm alternating with episodic fighting has prevailed for months."
Since April 14, when RSF began to push into El Fasher, at least 43 people—including women and children—have been killed due to fighting between the SAF and RSF.
"Civilians are trapped in the city, afraid of being killed should they attempt to flee," said Seif Magango, spokesperson for the U.N. high commissioner for human rights, Volker Türk. "This dire situation is compounded by a severe shortage of essential supplies as deliveries of commercial goods and humanitarian aid have been heavily constrained by the fighting, and delivery trucks are unable to freely transit through RSF-controlled territory."
The lack of humanitarian aid in North Darfur has pushed the state toward a famine, with one child dying of starvation every two hours, according to a February report by Doctors Without Borders.
In December, the U.S. State Department announced an $85 million sale of radar and other military equipment to the United Arab Emirates (UAE), which The New York Times reported last year has been covertly supporting the RSF.
U.S. Rep. Ilhan Omar (D-Minn.) proposed a joint resolution to block arms sales to the UAE in January, in light of its support for the paramilitary group.
Omar was among several lawmakers who wrote to President Joe Biden and Secretary of State Antony Blinken earlier this week, urging them to "deliver urgently-needed humanitarian assistance" and to help end the hostilities.
Sudanese-Australian writer Yassmin Abdel-Magied urged Americans on Friday to pressure lawmakers and the White House to take more action.
"There is a tiny window of opportunity for us to find a way to get the UAE... to make the RSF to stop in their tracks," said Abdel-Magied. "Maybe there's a way that we can avoid this massacre."
OCHA called on the warring parties to "take constant care to spare civilians and civilian objects in the conduct of military operations."
"They must, to the extent possible, avoid locating military installations within or near densely populated areas, including towns and camps for internally displaced people," said the office. "It is also imperative that the parties allow safe passage for civilians to leave El Fasher for safer areas."
Keep ReadingShow Less
With US Workers on the March, Southern States Take Aim at Unions
GOP leaders in the region are "truly astonished that workers might not trust their corporate overlords with their working conditions, pay, health, and retirement," said one critic.
Apr 26, 2024
Since six Southern Republican governors last week showed "how scared they are" of the United Auto Workers' U.S. organizing drive, Tennessee Volkswagen employees have voted to join the UAW while GOP policymakers across the region have ramped up attacks on unions.
The UAW launched "the largest organizing drive in modern American history" after securing improved contracts last year with a strike targeting the Big Three automakers—General Motors, Ford, and Stellantis. The ongoing campaign led to the "landslide" victory in Chattanooga last week, which union president Shawn Fain pointed to as proof that "you can't win in the South" isn't true.
The Tennessee win "is breaking the brains of Republicans in that region. They're truly astonished that workers might not trust their corporate overlords with their working conditions, pay, health, and retirement," Thom Hartmann wrote in a Friday opinion piece.
"The problem for Republicans is that unions represent a form of democracy in the workplace, and the GOP hates democracy as a matter of principle."
"The problem for Republicans is that unions represent a form of democracy in the workplace, and the GOP hates democracy as a matter of principle," he argued. "Republicans appear committed to politically dying on a number of hills that time has passed by. Their commitment to gutting voting rolls and restricting voting rights, their obsession with women’s reproductive abilities, and their hatred of regulations and democracy in the workplace are increasingly seen by average American voters as out-of-touch and out-of-date."
Just before voting began in Chattanooga, GOP Govs. Kay Ivey of Alabama, Brian Kemp of Georgia, Tate Reeves of Mississippi, Henry McMaster of South Carolina, Bill Lee of Tennessee, and Greg Abbott of Texas claimed that "unionization would certainly put our states' jobs in jeopardy" and the UAW is "making big promises to our constituents that they can't deliver on."
The next nationally watched UAW vote is scheduled for May 13-17 at a Mercedes-Benz plant in Vance, Alabama.
"Workers at our plant are ready for this moment," Mercedes employee Jeremy Kimbrell said last week. "We are ready to vote yes because we are ready to win our fair share. We are going to end the Alabama discount and replace it with what our state actually needs. Workers sticking together and sticking by our community."
As workers gear up for the election, the Alabama House of Representatives on Tuesday voted 72-30 for a bill that would withhold future economic incentive money from companies that voluntarily recognize unions rather than holding secret ballots. The state Senate previously passed a version of the legislation but now must consider it with the lower chamber's amendments.
The Associated Pressnoted that "Georgia Gov. Brian Kemp signed similar legislation on Monday" and that Tennessee already has one on the books.
With his signature on Senate Bill 362, "Kemp's aim is to thwart future organizing attempts by workers at automotive plants in Georgia, such as those operated by Hyundai Motor Group," according toThe Atlanta Journal-Constitution.
As the newspaper detailed:
Georgia has been a right-to-work state since 1947, when Congress passed the Taft-Hartley Act, allowing workers to refuse to join a union or pay dues, even though they may benefit from contracts negotiated by a union with their employer. Just 5.4% of workers in the state belonged to a union in 2023, according to the U.S. Bureau of Labor Statistics.
But the National Labor Relations Act of 1935, also known as the Wagner Act, protects the right for workers to form a union and collectively bargain for better wages and working conditions.
The new Georgia law is expected to be challenged in court, labor experts have said.
Acting U.S. Labor Secretary Julie Su told the AP on Thursday that she is not sure if the department will challenge the laws, given the National Labor Relations Board's responsibilities, but she stressed that "there are federal standards beneath which no worker should have to live and work."
In terms of joining a union, "that choice belongs to the worker, free from intervention, either by the employer or by politicians, free from retaliation and threats," Su said. "And what we are seeing is that workers who were thought to be too vulnerable to assert that right are doing it, and they're doing it here in the South."
The U.S. labor chief also slammed "unacceptable" union-busting efforts by companies and suggested that protecting the right to unionize is part of President Joe Biden's "promise to center workers in the economy."
"He has said he's the most pro-worker, pro-union president in history, and we are going to make good on that promise. And that includes making sure that workers have the right to join a union," Su said of the president.
Biden's commitment to workers and unionizing rights has caught the attention of GOP leaders. The governors' joint statement nodded to the UAW's January endorsement of the president, who is seeking reelection in November, and South Carolina's leader attacked the administration earlier this year.
During his January State of the State speech, McMaster declared that "we will not let our state's economy suffer or become collateral damage as labor unions seek to consume new jobs and conscript new dues-paying members. And we will not allow the Biden administration's pro-union policies to chip away at South Carolina's sovereign interests. We will fight. All the way to the gates of hell. And we will win."
News From the Statesreported Friday that "of all the foreign-owned automakers in South Carolina, BMW would be the most likely mark in the near term if enough of its workers show interest. The massive plant near Greer—the manufacturer's only U.S. production facility—employs some 11,000 people, twice the number of workers at Volkswagen in Tennessee and Mercedes in Alabama. It has operated in the Upstate for nearly 30 years and is in the process of adding electric vehicle lines."
However, a UAW spokesperson told the outlet that they don't yet have the numbers for the BMW and Volvo facilities in the state, and Marick Masters, a Wayne State University professor who studies the union, said: "I don't think they're writing anybody off but they know the history of unionization. And I would say South Carolina is a very inhospitable place for unions."
Keep ReadingShow Less
Most Popular