In an op-ed in the New York Times, CTJ Director Robert McIntyre debunks the notion that our tax policies soak the rich. "And why not close loopholes that allow corporations like General Electric and Boeing to go years without paying practically anything in corporate income taxes?" he wrote.
CTJ in the News
Researchers at Citizens for Tax Justice just released a new analysis that outlines the different areas where the Treasury Department's new inversions rules fall short. Treasury Secretary Lew has admitted that Congress needs to take action in order to really resolve the issue and the new CTJ research backs that up further.
"The new regulations will address the avoidance of taxes on profits already booked offshore," the group writes. "Many U.S. corporations are holding huge profits in their offshore subsidiaries and want to avoid paying the U.S. tax that is normally due if those profits are brought to the United States. Corporations that invert can use loans to route the money through the foreign company that ostensibly becomes the parent company after an inversion. The Treasury regulations would treat such a payment as a dividend and therefore taxable.
New U.S. Department of the Treasury inversion regulations helped slow the speed of American corporations moving abroad, but congressional action is needed to truly put the breaks on the phenomenon, according to a Citizens for Tax Justice analysis released Thursday.
When the group Citizens for Tax Justice examined 288 companies of the Fortune 500 from 2008 to 2012, it found an average effective rate of 19.4 percent. Some companies were able to whittle their tax obligations to nothing.
A recent study by Citizens for Tax Justice (CTJ) showed that Ireland is by far and away the country or territory with a population of over one million people being used by US companies for corporation tax avoidance purposes.
You know something fishy is afoot when the normally arcane world of tax law begins sprouting terms like "double Irish with a Dutch sandwich" to describe certain techniques. Terms like this are better suited for a billiards parlor or sex club than an annual tax report.
European governmental agencies have launched investigations, and the U.S. Senate has too. Worldwide bodies like the Organization for Economic Cooperation and Development (OECD) as well as NGOs like Citizens for Tax Justice have piled on. The business, accounting and legal communities are all abuzz.
By Patti Cohen
What it points to is a broader shift in the way the developed world is thinking of tax competition,” said Rebecca Wilkins of the Citizens for Tax Justice, an advocacy group in Washington. “It used to be viewed as a good thing to lure companies to your shores. What they figured out is that everybody loses in that game. It’s just been a massive race to the bottom.
A study by Citizens for Tax Justice examined the most profitable 288 of the Fortune 500 companies, the 288 that turned a profit in each year between 2008 and 2012. These "corporate tax dodgers" paid an effective tax rate of only 19.4 percent. Most interestingly, given the argument that our corporate tax rate forces inversions and puts U.S. companies at a competitive disadvantage compared to their overseas counterparts, the CTJ study found that "of those corporations in our sample with significant offshore profits, two thirds paid higher corporate tax rates to foreign governments where they operate than they paid in the U.S. on their U.S. profits." Damn those stubborn facts.
By Julia Love
But European regulators are subjecting sweetheart tax deals to greater scrutiny, meaning multinational companies may be forced to pay more than the rates they've enjoyed. The European Commission also took aim at Luxembourg's tax breaks to Italian carmaker Fiat SpA on Tuesday. Forecasting still more tax probes, federal tax expert Rebecca Wilkins said the scores of tech companies in Ireland seem like prime targets for investigators.
But European regulators are subjecting sweetheart tax deals to greater scrutiny, meaning multinational companies may be forced to pay more than the rates they've enjoyed. The European Commission also took aim at Luxembourg's tax breaks to Italian carmaker Fiat SpA on Tuesday. Forecasting still more tax probes, federal tax expert Rebecca Wilkins said the scores of tech companies in Ireland seem like prime targets for investigators."This is just the tip of the iceberg," said Wilkins, a senior counsel on federal tax policy at Citizens for Tax Justice.
By Meagan Clark
It’s impossible to know exactly how much Apple has saved in taxes over the past three decades by shipping profit through Ireland, said Rebecca Wilkins, a senior counsel at Washington, D.C.-based think tank Citizens for Tax Justice. "Their 10-K reports what they have in total in offshore cash but doesn’t break it down by country," she told International Business Times. "They only have to break it out from U.S. and non-U.S. cash."