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Major corporations and some individuals avoid as much as $100 billion a year in federal taxes by “off-shoring” the profits they make here in the U.S. or by setting up sham headquarters in tax haven countries.
According to Tax Shell Game: How Much Did Offshore Tax Havens Cost You In 2010?, a new U.S. Public Interest Research Group report, the use of offshore tax havens results in $434 in additional tax burden for taxpayers around the country.
“Main street businesses and ordinary taxpayers without access to an army of accountants to devise elaborate tax avoidance schemes are forced to pick up the tab every year. We’ve already paid to bail out the banks and other big corporations – is it fair to ask us to pay their taxes as well?” said U.S. PIRG Legislative Office Director Gary Kalman.
In the weeks and months leading up to Tax Day, Congress has debated the national debt, rising deficits, and across-the-board cuts to a range of public priorities such as food safety inspectors, Pell grants and clean air and water programs. U.S. PIRG has called on Congress to address the deficit by closing corporate tax loopholes, rather than cutting public priorities.
“We urge you to begin with closing loopholes that allow corporations to hide profits offshore. These entities benefit from access to American markets, an educated workforce, infrastructure and security and pay little or nothing for it,” Kalman wrote in a recent letter to Congressional leadership.
Due in part to complex tax avoidance schemes, nearly two-thirds of corporations doing business in the U.S. pay no income taxes at all, according to a 2008 report from the Government Accountability Office. More than 83 of the 100 largest publicly traded U.S. corporations have subsidiaries in tax haven countries or financial privacy jurisdictions. Companies that received taxpayer-funded bailout money or receive lucrative government contracts and use tax havens include American Express, A.I.G, Exxon Mobil, Goldman Sachs and Pfizer.
To learn more about the companies who lobby against reforms, read U.S. PIRG's report, Who Slows the Pace of Tax Reform.
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