CTJ in the News

Wall Street Cheat Sheet: Is Economic Patriotism Reason Enough to Close Corporate Loopholes?

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By Meghan Foley

Tax inversion costs the U.S. government as much as $20 billion over a ten-year period, according to research by the nonpartisan Joint Commission on Taxation. And while the the practice can be described as “good business,” the tax bills of major corporations like Boeing seem grossly unfair to the average American. Gallup survey data from April of this year shows that two-thirds of Americans believe corporations pay too little in taxes. According to the Government Accountability Office, using a combination of credits, exemptions, and offshore tax havens, U.S. corporations pay an average of less than 13 percent, with more than half of those companies owing no federal taxes in at least one year between 1998 and 2005. Plus, the advocacy group Citizens for Tax Justice found that 26 Fortune 500 corporations paid no federal corporate income tax over the most recent five-year period; in fact, many, even earned rebates. And while companies are paying less in taxes, Americans are paying more. It is that sense of inequality that President Obama is tapping into with his campaign for greater “economic patriotism.”

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Global Post: EU Edges Toward New Sanctions Against Russian Economcy

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By Paul Ames

Tax loopholes helped attract $36 billion in Russian investment to the Netherlands over the past seven years, according to Russian central bank figures, a level bettered only by Cyprus and the British Virgin Islands.

Much of that money is recycled back home by Russian conglomerates and their oligarch owners.

"It's a huge tax dodge and all the multi-nationals are using it," says Rebecca Wilkins, senior counsel at Citizens for Tax Justice, a think-tank in Washington.

"The Netherlands objects to us calling them a tax haven, but we stand by it," she says. "Billions and billions of dollars are moving through there every year."

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NJ Today: Republicans Put Child Tax Credit on the Chopping Block for Low-Income Families

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By NJ Today staff

The House of Representatives will vote on a bill that would expand the child tax credit (CTC) for higher income households while allowing a version of it for low-income working families to expire.

The Republican approach would mostly benefit those making over $100,000 a year, while making permanent the low-income provision championed by President Barack Obama and the Democrats would primarily help those making less than $40,000 a year.

Figures in a Citizens for Tax Justice report illustrate that Obama’s plan would save $493 for New Jersey families with income under $40,000, compared to just $55 under the GOP scheme.

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CNBC: Corporate 'inversions' are the latest ploy to upend the US tax code

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"It's true that the statutory tax rate—including state and local taxes—is close to 40 percent, the highest among the developed world. But U.S. companies apply a long list of tax credits, subsidies, loopholes and other giveaways, so most of them pay much less than the top rate. Some, according to an analysis by Citizens for Tax Justice, have figured out how to pay no tax at all.

Total corporate federal taxes fell to about 12 percent of profits from U.S.-based activity in 2011, according to a Congressional Budget Office report. In a separate study, the CBO found that the average tax rate in 2011 among developed countries was 3 percent of gross domestic product—compared with 2.3 percent of GDP in the U.S."

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It's true that the statutory tax rate—including state and local taxes—is close to 40 percent, the highest among the developed world. But U.S. companies apply a long list of tax credits, subsidies, loopholes and other giveaways, so most of them pay much less than the top rate. Some, according to an analysis by Citizens for Tax Justice, have figured out how to pay no tax at all.
Total corporate federal taxes fell to about 12 percent of profits from U.S.-based activity in 2011, according to a Congressional Budget Office report. In a separate study, the CBO found that the average tax rate in 2011 among developed countries was 3 percent of gross domestic product—compared with 2.3 percent of GDP in the U.S

 

MSN Money: Why Corporations Pay Less Taxes Than You

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By Maryalene LePonsie

While you may be dutifully sending off 25 percent or more of your income to the federal government each year, corporations are sharing a whole lot less with Uncle Sam.

According to a 2013 report from the U.S. Government Accountability Office, profitable corporations paid a mere 13 percent in federal income taxes in 2010. For comparison, the statutory tax rate -- that's the one set forth in law -- is 35 percent.

So how do corporations get away with paying only 13 percent of their income in taxes when they should be paying 35 percent?

...

U.S. PIRG and Citizens for Tax Justice say Apple is the biggest offender, having booked more than $111 billion offshore in 2013. Of course, Apple says it pays every penny it owes and, technically, that's correct.

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Washington Post: Making corporate tax dodgers patriotic

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"U.S. multinationals are doing more and more business abroad — a trend likely to continue because many foreign markets are outpacing the U.S. market. From 1970 to 2013, the share of U.S. profits earned abroad rose from 8 percent to 20 percent. Under U.S. law, U.S. firms receive a credit on foreign taxes paid and pay the U.S. corporate tax only when the remaining profits are repatriated to the United States. Not surprisingly, U.S. companies hoard foreign profits abroad. The stash now is about $2 trillion, estimates Citizens for Tax Justice, a left-leaning research and advocacy group."

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CNN: How corporations skip tax with overseas maneuver

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CTJ Director Robert McIntyre has a featured Op-Ed on CNN.com discussing corporate inversions:

"One can hardly read the news these days without learning that yet another American corporation has announced plans to invert, which is corporate-speak for restructuring as a foreign company to avoid U.S. taxes.

It's a trend that has increased exponentially over the past decade with barely a peep from Congress. Now that corporate giants such as Pfizer, Walgreen, Medtronic and Mylan have made bids to invert by merging with foreign companies and will be eligible to claim their headquarters are offshore to avoid U.S. taxes, Congress may finally act."

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Politifact: Nan Rich says Florida has 3rd most-regressive tax structure

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"Rich told PolitiFact Florida in an interview, "don’t hold me to ‘third regressive.’ .... I did not say ‘third’ definitively. ... We are one of the most regressive."

Rich cited a 2013 report by The Institute on Taxation and Economic Policy, which partners with Citizens for Tax Justice, a group that advocates for fair taxation of middle- and low-income families."

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KGBT-TV: Why Corporations Pay Less Taxes Than You Do

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"In other cases, they merge with a foreign company, then pay that country's lower tax rate, even though they're still headquartered right here in the U.S. You and I can't begin to do anything like that.

According to Citizens for Tax Justice, American companies avoided $90 billion in income taxes last year this way."

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In other cases, they merge with a foreign company, then pay that country's lower tax rate, even though they're still headquartered right here in the U.S. You and I can't begin to do anything like that.
According to Citizens for Tax Justice, American companies avoided $90 billion in income taxes last year this way

 

The Guardian: Ending the race to the bottom

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"Many billions of dollars in tax revenue are at stake. In a well-documented June report titled Offshore Shell Games, taxpayer advocacy group Citizens for Tax Justice and consumer advocacy group US PIRG say:

Only 55 Fortune 500 companies disclose what they would expect to pay in US taxes if these profits were not officially booked offshore. All told, these 55 companies would collectively owe $147.5bn in additional federal taxes. To put this enormous sum in context, it represents more than the entire state budgets of California, Virginia and Indiana combined."

"Rebecca Wilkins of Citizens for Tax Justice says companies need to take it upon themselves to resist tax dodges. She formerly worked at auditing firm KPMG and says: “You sit across the table from a client, and they know when it’s too aggressive, and a lot of clients would decline to participate.” The big accounting firms have a role to play, too. “It’s really frustrating to see a lot of people in the tax industry encouraging this conduct,” she says."

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