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source: snip of magazine cover from Honeywell.com
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The top 500 US companies
retained US$620 billion that would have otherwise been taxed and spent by the
government by using overseas bank accounts, according to a report from Citizens
for Tax Justice and the US Public Interest Research Group Education Fund.
“At
least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries
in tax haven jurisdictions as of the end of 2014,” the report states. In total, the 500
companies keep about US$2.1 trillion in tax havens outside the US, most often
in Bermuda or the Cayman Islands.
RT report continues:
So-called
“offshore” profits often don’t leave the US economy, however. The money is
still circulating within America, just under the name of a registered foreign
subsidiary of a US company. The report’s conclusion is that the real problem
lies in too many loopholes resulting in too little government revenue.
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© Carlos
Jasso / Reuters
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“There
are clear policy solutions that lawmakers can enact to crack down on tax haven
abuse. They should end the incentives for companies to shift profits offshore,
close the most egregious offshore loopholes and increase transparency,” the
report recommends.
A
bipartisan bill in Congress would lower the corporate tax rate from 35 percent
to 6.75 percent for a five-year period, enticing companies to return their
funds from the tax havens. Senators Barbara Boxer (D-California) and Rand Paul
(R-Kentucky) are co-sponsors of the Invest in Transportation Act of 2015, which
would send the taxes collected to the Highway Trust Fund.
The
bill, which was introduced in January, hasn’t passed the Senate though, amidst
skepticism that, as a “tax holiday,” it would constitute irresponsible
budgeting, and President Obama isn’t expected to support a tax cut on large
corporations.
Robert
McIntyre, director of Citizens for Tax Justice, also balked at the idea,
telling the Hill, “Incredibly, Congress is considering pouring salt on the
wound by giving companies a special low tax rate to ‘repatriate’ profits that,
in many cases, are likely already here.”
However, a study by the New
Democrat Network said the bill could add US$68.9 billion to the Highway Trust
Fund.
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