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Cash stashed offshore by top 50 US companies jumps to $1.6 trillion

The 50 biggest US companies, including global brands Pfizer, Goldman Sachs, General Electric, Chevron, Wal-Mart, and Apple, stashed $1.6 trillion offshore in 2015 –  U$200 billion more than the previous year – according to a new Oxfam report.

 

united states estados unidos bandera pixabayThe report, Rigged Reform, reveals that big US companies are increasing their use of tax havens and boosting their investment in political lobbying in order to push for even greater tax breaks.

It warns that President Trump’s proposed tax reforms will further rig American tax laws in favour of the rich and powerful and intensify the destructive global race to the bottom on corporate tax – at the expense of poor communities in the US and around the world.

The report finds: – The 50 largest US companies used a secretive network of 1,751 subsidiaries in tax havens to stash about $1.6 trillion offshore in 2015. The companies reported an additional 143 tax haven subsidiaries and $200 billion in offshore earnings compared to 2014.

Tax reforms proposed by President Trump and leaders in Congress could give these 50 companies a windfall of between $312 and $327 billion on the profits they hold offshore, in addition to massive financial benefits resulting from a dramatic cut in corporate rates and other more favourable tax treatments.

money-ricos-dinero-pixabay The 50 companies spent $2.5 billion lobbying the US government between 2009 and 2015. An estimated $352 million was spent lobbying on tax issues – helping to secure over $423 billion in tax breaks. Oxfam estimates that for every $1 these companies spent lobbying on tax, they received an estimated $1,200 in tax breaks.

Five companies – General Electric, Verizon Communications, Comcast, AT&T and Exxon Mobil – account for approximately a quarter of all lobbying on tax by the top 50 companies.

Oxfam’s Head of Inequality Ana Arendar said: “These companies have deepened their use of tax havens and increased efforts to build influence to push for even greater tax breaks than they already have. (…) Corporate tax dodgers cheat the US out of approximately $135 billion in unpaid tax revenues every year and poor countries out of an estimated $100 billion annually.”

Rigged Reform highlights how President Trump’s tax reforms are being paid for by cuts to programmes designed to help the poorest people in the US and overseas. This includes a proposed 31 per cent cut to overseas development aid at a time when 20 million people face starvation in Yemen, Somalia, South Sudan and Nigeria.

beyoond modernism pixabayThe proposal to cut US corporate tax rates from 35 per cent to 15 per cent will also feed into a destructive race to the bottom that has seen countries slashing corporate tax rates in recent years.

The proposed Border Adjustment Tax, which will increase taxes on imports, is likely to harm poor consumers in the US and poor people around the world.

The report follows Oxfam research last December which revealed that four UK-linked tax havens were among the world’s worst 15. Despite the UK government’s progress in clamping down on businesses who avoid paying their fair share of tax, the UK’s Crown Dependencies and Overseas Territories continue to operate as tax havens.

Oxfam is calling on the UK government to pass an amendment to the Criminal Finances Bill that would compel British Overseas Territories to publish registers revealing the owners of companies set up there.

justicia-justice-pixabayThis would help detect and prevent tax dodging so that governments – especially of poor countries – can claim what they are owed.

Arendar said: “This report shows how tax avoidance continues to help the rich get richer at the expense of the poor. Governments, including the UK and the US, must work together to ensure all big businesses pay their fair share.

(Photos: Pixabay)

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