For Immediate Release: August 1, 2013
VIRGINIA COMPANIES GENERAL DYNAMICS AND NORTHUP GRUMMAN TOOK PART IN OFFSHORE TAX LOOPHOLES
Petersburg, Va.—Virginia Organizing released a report (found here) showing a majority of large corporations are avoiding taxes by shifting profits to offshore tax havens. As Congress considers more cuts to programs that benefit Virginians, Virginia Organizing is urging Congress to close loopholes that allow companies to dodge tax responsibility.
The Public Interest Research Group (PIRG) study of the top 100 publicly traded companies, measured by revenue, found that 82 maintain subsidiaries in offshore tax havens. These companies report holding nearly $1.2 trillion offshore which is not subject to U.S. taxes unless brought back to America.
“It is completely unacceptable that the same companies that benefit from the funding for vital programs like education, transportation, safety, and other infrastructure, are using tax loopholes to avoid paying their fair share for these services,” said Virginia Organizing Chairperson Sandra A. Cook.
Virginia Organizing will continue to call on Congress to end incentives for companies to shift profits offshore and bring tax revenue back the U.S.
Key findings of the report include:
– 82 of the top 100 publicly traded U.S. companies operate subsidiaries in tax-haven jurisdictions, as of 2012. All told, these 82 companies maintain 2,686 tax haven subsidiaries. The 15 companies with the most money held offshore collectively operate 1,897 tax-haven subsidiaries.
– The 15 companies with the most money offshore hold a combined $776 billion overseas. That is 66 percent of the nearly $1.2 trillion that the top 100 companies report holding offshore.
– All companies have to pay U.S. taxes on this offshore income when it is repatriated to the United States. Only 22 of the top 100 publicly traded companies disclose the amount they would expect to pay in U.S. taxes if they didn’t keep these profits offshore. All told, these 22 companies would collectively owe more than $98 billion in additional federal taxes, which is more than the entire state budget of California. The average tax rate the 22 companies currently pay to other countries on this income is a mere 6.7 percent – a fraction of the official U.S. corporate tax rate of 35 percent.
Companies highlighted by the study include:
– Bank of America: The bank reports having 316 subsidiaries in offshore tax havens – more than any other company. The bank, which was kept afloat by taxpayers during the 2008 financial meltdown, now keeps $17.2 billion offshore, on which it would otherwise owe $4.5 billion in U.S. taxes.
– Oracle: The tech giant reports having $20.9 billion stored offshore and maintains five subsidiaries in offshore tax havens. The company disclosed that it would owe $7.3 billion in U.S. taxes on those profits if they were not offshore. Oracle currently pays a tax rate of less than one percent to foreign governments on its offshore cash, suggesting that most of the money is kept in tax havens.
– Google: The company reported operating 25 subsidiaries in tax havens in 2009, but since 2010 only discloses two, both in Ireland. During that period, it increased the amount of cash it had reported offshore from $7.7 billion to $33.3 billion. An academic analysis found that, as of 2012, the 23 no-longer-disclosed tax haven subsidiaries were still operating but that Google was choosing not to include them in its annual filings.
To interview a spokesperson for Virginia Organizing, please contact Amanda Pohl at 804-337-1912 or email@example.com.
Virginia Organizing is a non-partisan statewide grassroots organization that brings people together to create a more just Virginia.