Offshore tax havens help dozens of companies avoid paying nearly 600 billion in taxes
Apple is worth roughly 700 billion dollars. Microsoft is worth rough 70 billion. Over the past few years, congressional hearings exposed how both companies moved money overseas to avoid paying U.S. taxes. But as a new report shows, Apple and Microsoft are two of dozens of companies who take part in the practice.
Matt Gardner, executive director of the Institute on Taxation and Public Policy, said companies known to use offshore tax havens include Nike, Safeway, American Express, Bank of America, Wells Fargo and the pharmaceutical giant Amgen. The impact on the U.S. Treasury is significant, he said.
“If these companies paid the U.S. taxes that they ought to be paying on this income,” he said, “we’d be talking about $600 billion.”
At the end of 2014, 304 Fortune 500 companies collectively held more than $2 trillion in Bermuda, the Cayman Islands, the Bahamas and other countries – places that Gardner said provide very little in the way of real business opportunities for American corporations such as Qualcomm, Safeway and Microsoft.
Many corporations that fail to disclose whether their offshore holdings are tax havens are the same ones lobbying Congress to enact a temporary “tax holiday” or a permanent exemption for offshore income, Gardner said. Both proposals only would reward companies for shifting profits overseas, he said, predicting that average Americans would end up footing the bill.
“When corporations don’t pay their fair share,” he said, “really, the impact is that the rest of us – middle-income families and small businesses – pay more to make up the difference.”
The report recommends Congress act sooner than later to put a stop to offshore tax havens. Gardner said each of 77 companies in the survey increased their declared offshore cash by at least $500 million each in the last year alone.