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The Biggest Tax Scam Ever: How Corporate America Parks Profits Overseas, Avoiding Billions in Taxes
From Democracy Now!
As Burger King heads north for Canada’s lower corporate tax rate, we speak to Rolling Stone contributing editor Tim Dickinson about his new article, "The Biggest Tax Scam Ever." Dickinson reports on how top U.S. companies are avoiding hundreds of billions of dollars by parking their profits abroad — and still receiving more congressionally approved incentives. Dickinson writes: "Top offenders include giants from high-tech (Microsoft, $76 billion); Big Pharma (Pfizer, $69 billion); Big Oil (ExxonMobil, $47 billion); investment banks (Goldman Sachs, $22 billion); Big Tobacco (Philip Morris, $20 billion); discount retailers (Wal-Mart, $19 billion); fast-food chains (McDonald’s, $16 billion) – even heavy machinery (Caterpillar, $17 billion). General Electric has $110 billion stashed offshore, and enjoys an effective tax rate of 4 percent – 31 points lower than its statutory obligation to the IRS."
Democracy Now!
What I find particularly irritating is this excerpt--
And it appears to be legal. This is not, you know, something that has been cracked down on by Congress. But the white-shoe accountants have figured out a way to sort of disappear this money and put it overseas. And I should mention that the U.S. has a global system of taxation, so that corporate profits around the world from an American-based multinational are supposed to be taxed. And that reflects the idea that the U.S. Navy secures shipping lanes, that our courts protect intellectual property across the world. And this has been practiced for more than a century, Supreme Court-approved since 1924. So this is not a new idea. But there’s sort of an incredible amount of accounting innovation that has gone into figuring out how to make profits disappear and in fact appear as losses in the United States, as the cash piles up in foreign subsidiaries, which in turn bank their money right back here in the United States. And then, when the CEOs need to use that money here in the United States, there’s something called "synthetic cash repatriation," where they’re able to use the same sort of accounting tricks either through short-term revolving loans or through bond offerings here in the United States, as Apple has done. And so, the cash can sort of—the power of the cash can reappear here in the United States. And the only one cut out of the loop is Uncle Sam, who’s supposed to get, you know, 35 percent the moment the money returns to the country.
So these corporate cheats rely on American taxpayers for secure shipping lanes and intellectual property laws to protect their "interests," as well as social-safety nets such as food stamps and Medicaid to subsidize their poorly-paid employees, to name a few, while hiding their profits offshore and demanding Congress reduce their tax rate.
Time to demand the Burger Welfare Kings pay their share!
14 replies
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...our publically funded infrastructure. roads, bridges, airports ect
It amazes me how two major "inters"--the interstate and the internet--were researched and developed with public money and now are threatened by privatization through toll roads and anti-net neutrality advocates.
Did I say this "amazes me?" It ****ing irritates me!
It amazes me how two major "inters"--the interstate and the internet--were researched and developed with public money and now are threatened by privatization through toll roads and anti-net neutrality advocates.
Did I say this "amazes me?" It ****ing irritates me!
