THESE VIRGINIA FORTUNE 500 COMPANIES HAD 71 SUBSIDIARIES IN TAX HAVENS
Petersburg, Va.—Tax loopholes allowed seven Virginia Fortune 500 companies—led by Computer Sciences Corporation—to maintain a total of $9 billion in profits offshore in 2014, much of the money in tax havens, according to a report released today by the U.S. Public Interest Research Group (USPIRG). These seven companies had a total of 71 subsidiaries in offshore tax havens last year. The corporations are able to dodge paying any U.S. taxes on these profits until they are brought back to the United States, which may never happen.
The report, “Offshore Shell Games,” is available here.
“This report shows that Virginia Organizing is on the right track organizing for tax fairness,” said Sandra A. Cook, Virginia Organizing Board Chairperson. “When corporations dodge taxes, the people are left with the bill. These same corporations benefit from our excellent public schools and universities, safety services, and infrastructure that our tax dollars support. It’s time for these multinational corporations to pay what they owe.”
Nationally, the report found that 72 percent of Fortune 500 companies used tax havens in 2014 and reported booking $2.1 trillion offshore for tax purposes, with just 30 companies accounting for 65 percent of the total, or $1.4 trillion.
“Virginia Organizing is asking U.S. Senator Mark Warner and U.S. Senator Tim Kaine to take a stand against corporate tax dodging and hold these corporations accountable for what they owe,” said Cook. “The current system is a shame and a disgrace.”
The report is being released as leaders in Congress have been considering legislation that would enable corporations to bring the $2.1 trillion in offshore profits home at a deep—and unwarranted—discount and to use those funds to plug a shortfall in the Highway Trust Fund. The report found that 57 companies reported that they are paying an average tax rate of six percent on these offshore profits, as most of them are in tax havens. Based on that, the report estimates that the U.S. could reap $620 billion if corporations pay what they owe on these offshore profits.
Key findings of the report include:
Virginia Fortune 500 Companies
- Seven Virginia Fortune 500 companies have a total of $8.994 billion in offshore profits that are untaxed in the United States, as of 2014.
- Those companies operate 71 subsidiaries in tax haven jurisdictions.
- Virginia companies with offshore profits and their number of tax haven subsidiaries are:
|
Virginia Company
|
Total Unrepatriated Profits
$ Millions |
Total Tax Haven Subsidiaries
|
|
Computer Sciences Corporation
|
$2,552
|
37
|
|
General Dynamics
|
$1,900
|
9
|
|
Genworth Financial
|
$1,642
|
10
|
|
Capital One Financial
|
$1,400
|
0
|
|
MeadWestvaco
|
$1,360
|
3
|
|
Advance Auto Parts
|
$108
|
0
|
|
Owens & Minor
|
$32
|
12
|
|
TOTAL
|
$8,994
|
71
|
All Fortune 500 Companies
- Fortune 500 companies are holding more than $2.1 trillion in accumulated profits offshore for tax purposes. Just 30 Fortune 500 companies account for 65 percent of these offshore profits. These 30 companies with the most money offshore have booked $1.4 trillion overseas for tax purposes.
- Only 57 Fortune 500 companies disclose what they would expect to pay in U.S. taxes if these profits were not officially booked offshore. In total, these 57 companies would owe $184.4 billion in additional federal taxes, which is nearly four times Virginia’s 2015 budget. Based on these 57 corporations’ public disclosures, the average tax rate that they have collectively paid to foreign countries on these profits is a mere 6.0 percent, indicating that a large portion of this offshore money has been booked in tax havens. If we apply that average tax rate of 6.0 percent to the entirety of Fortune 500 companies, they would collectively owe $620 billion in additional federal taxes.
- The company that dodges the most taxes by stashing its profits in tax havens is Apple. It has booked $181.1 billion offshore on which it has paid less than a 3% tax rate to foreign governments, based on filings to the Securities and Exchange Commission. Apple would owe $59.2 billion in U.S. taxes if these profits were not officially held offshore for tax purposes.
The report concludes that to end tax haven abuse, Congress should end incentives for companies to shift profits offshore, close the most egregious offshore loopholes, and increase transparency.
“Offshore Shell Games” is available for download here.
To interview a spokesperson for Virginia Organizing, please contact Amanda Pohl at 804-337-1912 or amanda@virginia-organizing.org
Virginia Organizing is a non-partisan statewide grassroots organization that brings people together to create a more just Virginia.
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