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New Poll: Small Businesses Overwhelmingly Support Closing Offshore Tax Loopholes for Large Corporations
WASHINGTON – A new scientific poll of small businesses found that small business owners overwhelmingly support closing loopholes that let large multinationals avoid taxes by artificially shifting their profits offshore. The poll was commissioned by the American Sustainable Business Council and the Main Street Alliance, which collectively represent over 300,000 small businesses throughout the country.
“It’s no surprise that small business owners want to stop large companies from setting up shell companies in tax havens like the Cayman Islands to shrink their tax bill,” said Dan Smith, Tax and Budget Advocate for U.S. PIRG. “Offshore tax havens give large multinationals a competitive advantage over responsible small businesses which don’t use tax havens and get stuck footing the bill for corporate tax dodging.”
Key findings of the poll include:
- 85% of small business owners oppose “a tax system that would allow U.S. multinational corporations to avoid taxes permanently by shifting their income to places like the Cayman Islands.” By contrast, the “LIFT” coalition – made up of companies that keep nearly all of their cash offshore like Pfizer, Hewlett-Packard, and Johnson & Johnson – recently formed to push for a so-called “territorial” tax system.
- 64% of small business owners support “requir[ing] all U.S. corporations to pay income taxes regardless of the country in which the income was earned.”
- When asked what Congress’s top budget priority should be, the small businesses surveyed selected “closing tax loopholes for large corporations” over every other option, including cutting various types of spending and raising taxes on the wealthiest 2%. Twice as many selected this option over the one with the next highest level of support.
A recent U.S. PIRG report found that the average small business would have to pay $3,067 to cover the cost of offshore tax dodging by large corporations, which is estimated to cost the federal treasury $90 billion a year in lost revenue.
“Congress should waste no time in passing the CUT Loopholes Act (S.264), which would close the most egregious offshore tax loopholes and level the playing field for small businesses,” said Smith.
Many of America’s largest and best-known corporations use complex tax avoidance schemes to shift their profits offshore and drastically shrink their tax bill:
- Pfizer, the world’s largest drug maker, made 40 percent of its sales in the U.S. over the past five years, but thanks to their use of offshore tax loopholes they reported no taxable income in the U.S. during that time. The company operates 172 subsidiaries in tax havens and has $73 billion parked offshore which remains untaxed by the U.S., according to its own SEC filing. That is the second highest amount of money sitting offshore for one U.S. multinational corporation.
- Microsoft avoided $4.5 billion in federal income taxes over a three year period by using sophisticated accounting tricks to artificially shift its income to tax-friendly Puerto Rico. Microsoft maintains five tax haven subsidiaries and keeps 70 percent of its cash offshore, a total of $60.8 billion, on which it would otherwise owe $19.4 billion in U.S. taxes.
- Citigroup – a bank that was bailed out by taxpayers during the financial meltdown of 2008 – maintains 20 subsidiaries in tax havens and has $42.6 billion sitting offshore, on which it would otherwise owe $11.5 billion in taxes, according to its own SEC filing. Citigroup currently ranks eighth among U.S. multinationals for having the most money stashed offshore.
U.S. PIRG, the federation of state Public Interest Research Groups, is a non-profit, non-partisan public interest advocacy organization that takes on powerful interests on behalf of its members, working to win concrete results for our health and well-being.
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