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tax dodging
Tax Dodging by Super-Rich, Big Corporations Costs Nations Half a Trillion Per Year: Study
"The U.K. and the U.S. are both among the biggest enablers and the biggest losers of this lose-lose tax system," said the chief executive of the Tax Justice Network.
Nov 19, 2024
A study published Tuesday estimates that tax dodging enabled by the United States, the United Kingdom, and other wealthy nations is costing countries around the world nearly half a trillion dollars in revenue each year, underscoring the urgent need for global reforms to prevent rich individuals and large corporations from shirking their obligations.
The new study, conducted by the Tax Justice Network (TJN), finds that "the combined costs of cross-border tax abuse by multinational companies and by individuals with undeclared assets offshore stands at an estimated $492 billion." Of that total in lost revenue, corporate tax dodging is responsible for more than $347 billion, according to TJN's calculations.
"For people everywhere, the losses translate into foregone public services, and weakened states at greater risk of falling prey to political extremism," the study reads. "And in the same way, there is scope for all to benefit from moving tax rule-setting out of the OECD and into a globally inclusive and fully transparent process at the United Nations."
The analysis estimates that just eight countries—the U.S., Canada, the U.K., Japan, Israel, South Korea, Australia, and New Zealand—are enabling large-scale tax avoidance by opposing popular global reform efforts. Late last year, those same eight countries were the lonely opponents of the United Nations General Assembly's vote to set in motion the process of establishing a U.N. tax convention.
According to the new TJN study, those eight countries are responsible for roughly half of the $492 billion lost per year globally to tax avoidance by the rich and large multinational corporations, despite being home to just 8% of the world's population.
"The hurtful eight voted for a world where we all keep losing half a trillion a year to tax-cheating multinational corporations and the super-rich," Alex Cobham, chief executive of the Tax Justice Network, said in a statement Tuesday. "The U.K. and the U.S. are both among the biggest enablers and the biggest losers of this lose-lose tax system, and their people consistently demand an end to tax abuse, so it's absurd that the U.S. and U.K. are seeking to preserve it."
"It's perhaps harder to understand why the other handful of blockers, like Australia, Canada, and Japan, who don't play anything like such a damaging role, would be willing to go along with this," Cobham added.
TJN released its study as G20 nations—a group that includes most of the "hurtful eight"—issued a communiqué pledging to "engage cooperatively to ensure that ultra-high-net-worth individuals are effectively taxed." Brazil, which hosted the G20 summit, led the push for language calling for taxation of the global super-rich.
The document drew praise from advocacy groups including the Fight Inequality Alliance, which stressed the need to "transform the rhetoric on taxing the rich into global reality."
The communiqué was released amid concerns that the election of far-right billionaire Donald Trump in the U.S. could derail progress toward a global solution to pervasive and costly tax avoidance.
The new TJN study cites Trump's pledge to cut the statutory U.S. corporate tax rate from 21% to 15% and warns such a move would accelerate the global "race to the bottom" on corporate taxation.
"People in countries around the world are calling in large majorities on their governments to tax multinational corporations properly," Liz Nelson, TJN's director of advocacy and research, said Tuesday. "But governments continue to exercise a policy of appeasement on corporate tax."
"We now have data from these governments showing that when they asked multinational corporations to pay less tax, the corporations cheated even more," Nelson added. "It's time governments found the spines their people deserve from their leaders."
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Sanders, Schakowsky Introduce Corporate Tax Dodging Prevention Act
"American workers should not be paying more in federal income taxes, in a given year, than profitable companies like Target, Amazon, and T-Mobile," said the senator.
Apr 10, 2024
U.S. Sen. Bernie Sanders and Congresswoman Jan Schakowsky on Wednesday introduced a bill that aims to close tax loopholes for corporations, end tax breaks for businesses that move jobs abroad, and stop companies from hiding profits in tax havens.
"At a time of massive wealth and income inequality and soaring corporate profits, it is an outrage that many large, profitable corporations continue to pay little to nothing in federal income taxes," Sanders (I-Vt.) said in a statement. "As working people struggle to pay rent and put food on the table, we have a corrupt and rigged tax code that is designed to benefit the wealthy and the powerful at the expense of working families."
"Meanwhile, Republicans would make a bad situation even worse by providing even more tax breaks to their corporate campaign contributors and the billionaire class while proposing massive cuts to Social Security, Medicare, and Medicaid," he noted, nodding to GOP budget plans for fiscal year 2025, which begins in October.
"That is unacceptable. We need to create an economy and a government that works for all of us, not just the top 1%," Sanders asserted. "And, one of the ways we can begin to do that is by making sure that large corporations pay their fair share of taxes. American workers should not be paying more in federal income taxes, in a given year, than profitable companies like Target, Amazon, and T-Mobile."
"We need to create an economy and a government that works for all of us, not just the top 1%."
The Corporate Tax Dodging Prevention Act, unveiled as Americans prepare for the federal income tax deadline on Monday, could raise over $1 trillion in revenue over a decade with the tax haven provision alone, according to the Joint Committee on Taxation.
"Thanks to President Joe Biden, we are growing the economy from the bottom up and the middle out, but we must go even further by passing the Corporate Tax Dodging Prevention Act to help put the interests of everyday Americans ahead of billionaires and transnational corporations," said Schakowsky. "I thank Sen. Sanders for devoting his career to tackling income inequality and am proud to partner with him on this important measure."
Biden's budget blueprint for the next fiscal year, released last month, includes proposals to hike taxes for corporations and ultrarich individuals—whose wealth is soaring to record heights. Such policies are not expected to pass the divided Congress, but they serve as a clear statement of the Democratic president's position just months away from the November election.
When then-President Donald Trump—now the presumptive Republican nominee to face Biden—signed the Tax Cuts and Jobs Act in December 2017, he infamously declared that "corporations are literally going wild over this, I think even beyond my expectations."
Many of that law's cuts are set to expire at the end of next year. During an exclusive Florida fundraiser at the home of a billionaire investor over the weekend, the former president urged his supporters to help him "turn our country around" by taking steps including "extending the Trump tax cuts."
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Tax-Dodging Jeff Bezos to Save $610 Million With Move to 'Billionaire Bunker' in Florida
"If we had a national billionaire income tax, we'd collect that revenue no matter where he lived," said Americans for Tax Fairness.
Feb 13, 2024
Jeff Bezos, founder of the e-commerce behemoth Amazon and one of the richest men in the world, is poised to save at least $610 million in taxes by moving from Washington state to a hyper-exclusive Miami island that's been dubbed "Billionaire Bunker."
Bezos announced the move from Seattle—home to Amazon's headquarters—to Miami in an Instagram post on November 2. The previous month, Bezos purchased two mansions in Indian Creek Village for $68 million and $79 million. Other prominent figures, including retired NFL superstar Tom Brady and billionaire investor Carl Icahn, own properties on the island, which is only accessible to those with invites.
Bloombergreported last month that "Bezos emissaries have reached out to at least three other homeowners on the island about purchasing their properties, according to people familiar with the matter, who asked not to be identified discussing private matters. Conversations are ongoing."
While Bezos didn't mention the potential tax savings as one of the reasons for his move, the announcement came after Washington state's new 7% capital gains tax on the sale or exchange of stocks and other assets worth more than $250,000 took effect after a lengthy court fight. The tax brought in far more revenue in its first year than supporters expected.
As CNBCreported Monday, Bezos has been selling Amazon shares nearly every year for more than two decades—but he stopped in 2022, the first year of Washington's new tax.
Now that he's in Florida, which doesn't tax income or capital gains, Bezos has resumed selling his Amazon stock, dumping around 12 million shares worth roughly $2 billion last week. CNBC pointed to recent U.S. Securities and Exchange Commission filings showing that Bezos has "launched a pre-scheduled stock-selling plan to unload 50 million shares before Jan. 31, 2025. At today's price, that would total more than $8.7 billion."
"On the $2 billion sale last week, he saved $140 million that he would have paid to Washington state," CNBC observed. "On the entire sale of 50 million shares over the next year, he will save at least $610 million. And that's assuming Amazon shares remain flat. If they continue to rise, the value of his shares—and his tax savings—will be even higher."
"If Bernie's Make Billionaires Pay Act was signed into law during the pandemic Bezos would have paid $42,800,000,000 more in taxes and everyone in America would have had healthcare as a right."
According to the Institute on Taxation and Economic Policy (ITEP), Bezos' new home state has the most regressive tax system in the U.S.—a title that was held by Washington prior to the enactment of the 7% capital gains tax.
Bezos is currently worth around $197 billion, a number that can fluctuate significantly on a given day based on the movement of Amazon's stock price.
Warren Gunnels, staff director for U.S. Sen. Bernie Sanders (I-Vt.), argued in a social media post late Monday that Bezos' exorbitant wealth cries out for more aggressive taxation at the federal level.
"If Bernie's Make Billionaires Pay Act was signed into law during the pandemic Bezos would have paid $42,800,000,000 more in taxes and everyone in America would have had healthcare as a right," Gunnels wrote, noting that revenue from the 2020 bill would have been enough for Medicare to fully pay out-of-pocket healthcare expenses for all Americans for a year.
Right-wing commentators, such as the Cato Institute's Scott Lincicome and FreedomWorks' Stephen Moore, used Bezos' move to suggest that taxing the wealthy only pushes them to move elsewhere in search of lower tax rates.
But ITEP research director Carl Davis told Common Dreams that "when you look at the data, there isn't much support for the view that high-income people are moving in meaningful numbers because of taxes." A 2016 study by Stanford University researchers found that while "millionaire tax flight is occurring," it is "only at the margins of statistical and socioeconomic significance."
"Without good data to back them up," said Davis, "the folks who want to use migration fears to argue against taxing the rich often end up relying on anecdotes to make their point."
Americans for Tax Fairness, a progressive advocacy group, wrote on social media Tuesday that "if we had a national billionaire income tax, we'd collect that revenue no matter where he lived."
"Billionaires can't quit America to avoid paying," the group added. "If they left, we'd collect a fortune in exit taxes."
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