Using an “opaque and secretive network” of subsidiaries in tax havens, top American corporations have stashed $1.4 trillion offshore, a new report from Oxfam shows.
With “a range of tricks, tools, and loopholes,” for tax avoidance, the 50 largest U.S. companies, including well-known names like Goldman Sachs, Verizon Communications, Apple, Coca-Cola, IBM, and Chevron, raked in $4 trillion in profits globally between 2008 and 2014, are contributing to inequality, the anti-poverty group said.
The report, Broken at the Top (pdf), states that such tax dodging is one of the “profit-making strategies of many multinational corporations.”
As noted in the report,
- From 2008 – 2014 the 50 largest U.S. companies collectively received $27 in federal loans, loan guarantees and bailouts for every $1 they paid in federal taxes.
- From 2008 – 2014 these 50 companies spent approximately $2.6 billion on lobbying while receiving nearly $11.2 trillion in federal loans, loan guarantees and bailouts.
Explaining part of their strategy to lower their overall tax rate, the report states: “As a group, U.S. multinationals report that 43 % of their foreign earnings come from five tax haven jurisdictions, yet these countries accounted for only 4 % of the companies’ foreign workforces and just 7 % of their foreign investment.”
Take Bermuda, for example. The report states that U.S. companies reported $80 billion of profits in 2012 in the archipelago—but that’s more than the companies’ reported profits in Japan, China, Germany, and France combined. In other words, it “clearly does not reflect the real economic activity taking place in Bermuda.”
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