"Awash In Record Profits, Corporations Shift Even More To Offshore Tax Havens"
Even as American corporations are raking in record profits, the largest among them are shifting larger amounts of money away from the United States and into offshore tax havens that allow them to pad their bottom lines even more, according to multiple analyses of legal filings made since the beginning of 2013.
The Wall Street Journal found that the 60 largest companies moved $166 billion offshore in 2012, shielding 40 percent of their earnings from American taxes and costing the U.S. billions in lost revenue:
The amount of money at stake is significant, particularly when the U.S. budget deficit is high on the political agenda. Just 19 of the 60 companies in the Journal’s survey disclose the tax hit they could face if they brought the money back to their U.S. parent. Those companies say they might have to pay $98 billion in additional tax—more than the $85 billion in automatic-spending cuts triggered this month after the White House and Congress couldn’t agree on an alternative.
A similar analysis from Bloomberg found that 83 of the largest American companies moved $183 billion overseas in 2012, bringing the total offshore to $1.46 trillion for those 83 companies alone. Most of the companies, like Apple, Microsoft, and Yahoo, have set up subsidiaries in low-tax countries like Bermuda, Ireland, and the Cayman Islands specifically to receive tax benefits. That has ramifications for states, which lost $42 billion in revenue to corporate tax dodging in the last three years alone, and taxpayers and small businesses, who often have to pick up the tab.
And while the debate over corporate tax reform has flared again in Washington, the favorite reform of Republicans and corporate lobbying groups would only exacerbate the problem, making it easier for corporations to push even more money overseas at the expense of revenue and investment that could be made in the United States.