Shocking: Offshore tax havens of the US corporate elite
Tax money for tax cheats.
It's hard to otherwise describe the continuing federal bailouts that major US companies are enjoying in this woeful era of fiscal disaster, especially when--as a scandalous new report reveals--many of the key players aren't paying taxes.
The Government Accountability Office (GAO), Congress' investigative watchdog, has found that "a majority of America's largest publicly traded companies and the U.S. government's largest federal contractors use multiple subsidiaries in offshore tax havens to conduct business and avoid paying U.S. taxes," writes Carol D. Leonnig for The Washington Post.
The culprits include some corporate giants who are receiving countless millions in bailout money, Leonnig notes.
Democratic Sens. Byron Dorgan and Carl Levin, who released the report, say that companies such as Citigroup and Morgan Stanley have set up "hundreds of tax haven subsidiaries" in such inconspicuous nations as Luxembourg, Mauritius and the Cayman Islands.
Others figuring prominently in the corporate tax-haven list are such varied firms as 3M, American Express, Caterpillar, Cisco, ConocoPhillips, Dell, Dow Chemical, Exxon Mobil, FedEx, GM, Kraft, Merck, Pepsi, Pfizer, Procter & Gamble, Wachovia, and Rupert Murdoch's News Corporation, which tallied a whopping 782 foreign subsidiaries in 14 countries.
Among the federal contractors listed are Boeing, General Electric, Goodyear, Hewlett-Packard, Honeywell, IBM, ITT, Motorola, Oracle, and Xerox.
"This report shows that some of our country's largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes," says Sen. Dorgan (D-ND). "[S]ome of those companies have even received emergency economic funds from the government.
"[W]e should take action to shut down these tax dodgers," Dorgan says, "and we will be introducing legislation to do just that."
The practice of using offshore havens is legal, but the senators hope to gain the support of the Obama administration for legislation to outlaw it, Leonnig writes.
The GAO report in full can be seen at this link. Excerpts from the Post article, available in full at this link, follow...
GAO, searching publicly available data filed with the Securities and Exchange Commission, determined that 83 of the 100 largest publicly traded corporations and 63 of the 100 largest federal contractors maintain subsidiaries in countries generally considered havens for avoiding taxes. Dorgan and Levin said they requested the updated report from one several years ago because they are focused on combating offshore tax abuses, which they estimated cause $100 billion in lost U.S. tax revenue each year.
To illustrate the problem, Levin said the report found that Citigroup has set up 427 tax haven subsidiaries to conduct its business, including 91 in Luxembourg, 90 in the Cayman Islands and 35 in the British Virgin Islands. He said other havens include Switzerland, Hong Kong, Panama and Mauritius.
"We need to put an end to the use of offshore secrecy jurisdictions as tax havens," he said. He noted that not all companies use such havens and some use far fewer than others. For example, he said, "Pepsi has 70 tax haven subsidiaries, while Coca Cola has eight; Morgan Stanley has 273, while Fannie Mae has zero; and Caterpillar has 49, while Deere has three."