American multinational corporations are apparently dodging nearly $700 billion in U.S. taxes they owe on profits stockpiled offshore, according to a new “corporate tax chartbook” from Americans for Tax Fairness (ATF) and the Economic Policy Institute (EPI).
Last year, Fortune 500 companies had $2.4 trillion in untaxed offshore profits, on which they owe up to $695 billion in U.S. taxes, the analysis found.
“Corporations have not paid any U.S. taxes on these profits because our tax system lets them defer paying taxes until that income is brought back to the U.S. parent corporation (i.e., repatriated),” the report states.
This deferral process costs the U.S. Treasury roughly $126 billion annually or $1.3 trillion over a decade.
Forbes 400 members, including just two African Americans and five Latinos, are wealthier than the entire bottom 61 percent of the U.S. population, representing 194 million people or 70 million households.
America’s 20 wealthiest individuals alone (17 men and three women, all of whom are white) currently “own more wealth than the bottom half of the American population combined, a total of 152 million people in 57 million households,” according to the report.
The wealth divide is even more striking when compared along racial lines.
If Illinois small business owners were to collectively offset state and federal revenues lost annually due to corporations using offshore tax havens, they would each have to pay $4,570 in additional taxes a year.
That what-if scenario is laid out in a recent report from the Illinois Public Interest Research Group (PIRG) examining the issue of “corporate tax haven abuse” and what it means for small businesses.
Through the use of accounting “gimmicks” to shift profits offshore, corporations avoid paying $110 billion annually in federal and state income taxes combined, according to Illinois PIRG’s “Picking up the Tab” report. Specifically, about $90 billion in federal and $20 billion in state corporate income tax revenue is lost each year to tax havens, the research reveals.
Republican gubernatorial candidate Bruce Rauner funneled part of his wealth to a Caribbean territory long considered a tax haven, a business practice the venture capitalist defended on Sunday, stressing there was no impact on his personal tax rate.
Tax fairness activists delivered 70,000 petition signatures to a downtown Chicago Walgreens store Thursday, calling on the nation’s largest pharmacy chain to remain a U.S company and pay its “fair share of taxes.”
It is rumored that Deerfield-based Walgreen Co. is considering plans to reincorporate itself offshore in Switzerland, a “tax haven,” through a maneuver called a corporate tax inversion. Such a move could reportedly cost U.S. taxpayers $4 billion in lost tax revenue over a five-year period.
Tax fairness activists rallied outside of the Walgreens downtown Chicago flagship store Wednesday morning in protest of possible plans by the nation’s biggest pharmacy chain to move its corporate address from Illinois to Switzerland, a “tax haven.”
Toting signs reading “Walgreens, don’t shortchange America,” about 20 activists called on Deerfield-based Walgreen Co. to remain an Illinois company and drop a potential plan to reincorporate itself offshore through a maneuver called a “corporate tax inversion.” The move could cost U.S. taxpayers $4 billion in lost tax revenue over a five-year period, shows a new report released ahead of today’s protest by Americans for Tax Fairness and Change to Win Retail Initiatives.
“If Walgreens relinquishes Illinois roots by becoming a Swiss company, it will not only be a betrayal of the people of the great state of Illinois, it will undermine critical taxpayer-funded services that we all rely on,” stressed William McNary, co-director of Citizen Action/Illinois. “If Walgreens moves it corporate address offshore, it will still take advantage of all the benefits it gets from operating in America. It will still get the $72 billion in annual sales that we give them every year. It will still get the $16 billion that we as taxpayers give them for Medicare and Medicaid.”
from across the city rallied downtown Thursday afternoon to “out”
General Electric as a corporate tax dodger and to call upon U.S. Sen.
Dick Durbin (D-IL) to take charge and make corporations pay their fair
Chicago is one of 10 cities taking part in the National
People’s Action campaign this week meant to shine a light on various
corporate tax dodgers across the county. According to the protestors, GE
received $8.4 billion in federal tax breaks between 2008 and 2010.
“Everyday people are suffering while corporate taxes are at historic lows,
even though corporate profits are at an all time high,” said Toby
Chow, a leader with IIRON.
The following was written by Jacob Swenson, a community activist and University of Chicago student.
At the Apple store on Michigan Avenue Monday, not everyone was looking
to buy the latest version of the iPhone. Employees and customers alike
were taken by surprise when, during the lunch hour break, more than 60
members of Fair Economy Illinois began
chanting slogans such as “Apple, Apple you’re no good, pay your taxes
like you should!”
As the they assembled on the large glass
stairwell of the two-story building, activists held up signs that played
off Apple’s own creative branding, saying, “iPaid my taxes, Apple
should too” and “It doesn’t take a Genius to pay your taxes.”