When you’re mailing in your tax returns on Monday, they’ll be plenty of big multinational corporations laughing at you.
–Boeing Corporation from 2008 to 2010 had total pre-tax profits of $9.7 billion but did not pay a dime of its profits in federal taxes.
–Between 2006 and 2010, General Electric told their shareholders they had $26.3 billion in profits, but paid no U.S. taxes.
–Citigroup has paid no taxes for the last four years.
This Thursday I will be in Washington to speak to a Congressional staff briefing on tax haven abuse that enables corporations like Boeing, General Electric and Citigroup to dramatically lesson or even eliminate their corporate tax liability by primarily off-shoring profits. As a result, the rest of us pay more for the services of our federal government. Plus, these multinational corporation freeloaders have an unfair competitive advantage over American businesses that pay their taxes.
Below is some information from Business & Investors Against Tax Haven Abuse.
KEY POINTS:
Corporate Tax Dodgers Create an Unlevel Playing Field with Domestic U.S. Businesses. Responsible businesses have to compete unfairly against multinational companies that use offshore tax havens. A domestic U.S. business that pays its taxes is at an unfair disadvantage when multi-corporations game the system and shift profits to low or no tax havens.
Corporate Tax Dodging Shifts Money onto Responsible Tax Payers. The bills have to be paid –and no one should be able to opt out simply because they are politically connected and big. It undermines our system of government when some corporations pay little or nothing toward the range of public goods that includes aircraft carriers, shelters for the homeless, and schools for our kids.
We all must pay our fair share to maintain the public infrastructure for healthy business activity. Businesses thrive in healthy communities with adequate public services and infrastructure. All companies should pay their fair share of taxes for infrastructure, public services and the investments that have historically expanded opportunity in the US including K-12 and higher education.
Our businesses and communities will be hurt by tax cut austerity at local, state and federal level. States are facing the worst budget gaps in living memory. The Center on Budget and Policy Priorities estimates that the combined budget gaps in all U.S. states is over $102 billion. Closing overseas tax havens would generate an estimated $100 billion that could be used to reduce the worst of these cuts.
In the last 50 years, the gap between what corporations pay and the taxes paid by small business and individuals continues to widen. In 1961, small business owners and individuals paid twice as much in federal income taxes as large corporations. In 2011, small business owners and individuals are paying nearly five times in taxes what corporations pay. Between 1961 and 2011, taxes paid by small business owners and individuals rose 23-fold from $41 billion in 1961 to an expected $956 million in 2011. Over the same time period, large corporations saw their tax bill rise less than 10-fold, from $21 billion in 1961 to $198 billion expected in 2011.
Secrecy Undermines Healthy Business Environments. Tax havens are not only ways to reduce or eliminate taxes, but also a means for criminals and lawless corporations to circumvent the law, using secrecy as their primary tool. This is why the Tax Justice Network prefers to refer to tax havens as “secrecy jurisdictions.”
POLICY REMEDIES
No Corporate Tax Holiday for Offshore Profits. Multinational technology and drug companies are lobbying Congress to allow them to repatriate $1.2 trillion in profits they have parked offshore. They would like to pay 5.25 percent taxes on these profits, rather than the statutory rates.
Pass the “Stop Tax Haven Abuse” Act. This would address a variety of abuses (about to be reintroduced in the 112th Congress). $100 billion a year.
Ending Deferred Corporate Income Taxes. This would reduce the incentive for corporations to use tax havens and move jobs offshore. According to Citizens for Tax Justice, ending corporate tax deferral would raise at least $50 billion per year.
Country by Country Reporting. Require global corporations to report sales made, profits earned and taxes paid in every jurisdiction where an entity operates.
Automatic Exchange of Tax Data – through international tax cooperation among governments. Require governments to collect data from financial institutions on income, gains, and property paid to non-resident individuals, corporations and trusts. Mandate that data collected automatically be provided to the governments where nonresident entity is located.
Require Disclosure of Beneficial Ownership of all business entities, trusts, foundations and charities. Require this information be readily available on public record to facilitate effective due diligence; and explicitly require, and enforce, that financial institutions identify the ultimate beneficial owners or controllers of any company, trust or foundation seeking to open an account.