Enough Is Enough
It’s time for Washington to cut Egypt loose.
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Apple may get the brunt of the attention for its use of offshore havens to offset the taxes it pays in the U.S., but it’s hardly alone.
Six of the biggest names in technology — Apple, Microsoft, IBM, Cisco Systems, Hewlett-Packard and Google – ranked in the Top 15 of the 100 publicly-traded companies (as measured by revenue) with the most money held offshore, according to a new report called “Offshore shell Games” by U.S. PIRG, a federation of public interest research groups.
“Many large U.S.-based multinational corporations avoid paying U.S. taxes by using ac¬counting tricks to make profits made in America appear to be generated in offshore tax havens—countries with minimal or no taxes,” the group says in its 35-page report on the legal loopholes used to shift profits offshore. “By booking profits to subsidiaries registered in tax havens, multinational corporations are able to avoid an estimated $90 billion in federal income taxes each year. These subsidiaries are often shell companies with few, if any employees, and which engage in little to no real business activity.”
The Top 15 companies for 2012 are: General Electric, Apple, Pfizer, Microsoft, Merck, Johnson & Johnson, IBM, Exxon Mobil, Citigroup, Cisco Systems, Abbott Laboratories, Procter & Gable, Hewlett-Packard, Google and PepsiCo. Together, they held $776 billion off shore through a combined 859 tax haven subsidiaries.
Here are some of the other findings from the report, which says the use of tax havens is “ubiquitous” among the 100 companies it studied:
• As of 2012, 82 out of the top 100 publicly-traded U.S. com¬panies operated, collectively, 2,686 subsidiaries in tax haven ju¬risdictions. Those jurisdications included Ireland,
• Only 21 of the top 100 disclose what they would expect to pay in taxes if they didn’t keep profits off¬shore. “All told, these companies would col¬lectively owe over $93 billion in additional federal taxes. To put this enormous sum in context, it represents close to the entire state budget of California and more than the federal government spends on education.”
• The 15 companies with the most money offshore hold a combined $776 billion overseas., which is 66 percent of the approxi¬mately $1.17 trillion held abroad by the 100 companies studied.
• The average tax rate these companies currently pay to other countries on this income is just 6.9 percent, well below lower the 35 percent statutory U.S. corporate tax rate.
The group notes that these companies aren’t doing anything illegal, but rather “gaming” the tax code system. It makes recommendations for closing some of those loopholes, including
A ship going from England to Manilla by way of the Suez Canal would pass through (perhaps) the English Channel, the North Atlantic Ocean, Bay of Biscay (possibly), Strait of Gibraltar, Mediterranean Sea, Suez Canal, Red Sea, Gulf of Aden/Arabian Sea, Indian Ocean, Gulf of Thailand (may have been called Gulf of Siam at that time), South China Sea.
We pretend that factoids are a useful proxy for scientific literacy, and in turn that scientific literacy is a useful proxy for good citizenship. But there’s simply no evidence this is true.
"IT’S LIKE, HOW DOES THIS HAPPEN?"
"THIS IS GETTING IN THE HANDS OF OUR KIDS."
EVEN LEGALIZATION ADVOCATES SEE CAUSE FOR CONCERN IN COLORADO
"THE SKY IS NOT FALLING IN COLORADO."