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First Step to Avoid the Fiscal Cliff: Close Offshore Tax Loopholes December 6th, 2012
Offshore Tax Dodging Costs U.S. $150 Billion Annually; U.S. PIRG Illustrates Impact with 16 Dramatic Ways Lost Revenue Could Be Used
With Congress scrambling to agree on ways to reduce the deficit, U.S. Public Interest Research Group (U.S. PIRG) released a new analysis pointing out a clear first step to avoid the “fiscal cliff”: closing offshore tax loopholes. Many of America’s largest corporations and wealthiest individuals use accounting gimmicks to shift profits made in America to offshore tax havens, where they pay little to no taxes. This tax avoidance costs the federal government an estimated $150 billion in tax revenue each year. U.S. PIRG’s new data illustrates the size of this loss with 16 dramatic ways $150 billion could be spent.
“When corporations skip out on their taxes, the rest of us are left to pick up their tab,” said Dan Smith, Tax and Budget Advocate for U.S. PIRG. “Right now, this kind of tax dodging is perfectly legal, but it’s not fair and it’s time to put an end to it.”
At least 83 of the top 100 publicly traded corporations in the U.S. make use of tax havens, according to the GAO. American companies like Wal-Mart, Coca Cola, and Pfizer – which benefit from our educated workforce, infrastructure, and security – keep more than 70% of their cash offshore. Thirty of America’s largest, most profitable corporations actually made money off our tax code between 2008 and 2010 by avoiding taxes altogether and receiving tax rebates from the government. By using offshore tax havens, corporations and wealthy individuals shift their tax burden to ordinary Americans and small businesses, forcing us make up the difference through cuts to public services, a bigger deficit, or higher taxes for everyday citizens.
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