Walmart’s $21.4 billion in untaxed offshore profits is part of that corporate tax-avoidance trend.
“What’s going on on the Hill is really, really insane,” said Stephen Wamhoff, legislative director for Citizens for Tax Justice, speaking of the growing obsession with tax reform. “Members and staffers are saying that they should renegotiate and get the policy right and not talk about revenue numbers.”
“The whole purpose of taxes is to raise revenue. So how will they decide what that plan is?” he asked, explaining that Republicans want to keep cutting corporate taxes, even if America's biggest business aren't paying an estimated $100 billion a year. Worse, plenty of Democrats are going along with this script, Wamhoff said, instead of demanding a fairer system and more revenue for needed essentials. “It’s crazy,” he remarked.
The aerospace giant hauled in more than $20 billion in federal contracts in 2013. According to Citizens for Tax Justice, taxpayers also picked up the tab for $300 million of Boeing’s research expenses last year through a tax break that Congress is now considering making permanent.
When tax time came, Boeing got $82 million back from the IRS, despite reporting nearly $6 billion in U.S. pre-tax profits. Meanwhile, Boeing chief executive Jim McNerney made $23.3 million.
Corporate tax dodging is bad for ordinary Americans — and our nation’s long-term economic health.
Meanwhile liberal groups want some of the business tax breaks eliminated.
"Lawmakers are willing to increase the deficit in order to hand out tax subsidies like the tax extenders to corporations and other businesses, even while they insist that any benefits for working families or the unemployed must be somehow paid for in order to avoid an increase in the deficit," says Citizens for Tax Justice.
What’s more, there’s no real reason to prioritize the repeal of the medical device tax. Firms are posting record profits. Earlier this year, Boston Scientific, which manufacturers pacemakers and other heart-related products, increased quarterly profits by more than 80 percent. Major medical device firms, including General Electric (owner of GE Healthcare), Baxter International and Abbot Laboratories are prolific tax dodgers, using an array of tax shelters to pay as little as 2 percent in federal income taxes on average, according to Citizens for Tax Justice. Repealing the medical device tax, which generates about $30 billion for the government over 10 years, would increase the deficit while padding the companies’ profits.
In fact, 26 of America’s top 288 corporations didn’t even pay their income taxes from 2008 to 2012, reported RT.
“Tax subsidies for the 288 companies over the five years totaled a staggering $364 billion, including $56 billion in 2008, $70 billion in 2009, $80 billion in 2010, $87 billion in 2011, and $70 billion in 2012,” said Citizens for Tax Justice. “These amounts are the difference between what the companies would have paid if their tax bills equaled 35 percent of their profits and what they actually paid.”
And he added the issue is a ‘tiny’ one compared to companies such as General Electric Co which, he said, made $11 billion in profits and paid no federal income tax. “The agenda there is it is quite likely fuelled by traditional companies.”
Reuters has reported that the company had paid no federal income tax for the years between 2008-2012, the years measured by the group Citizens for Tax Justice.
The leaked documents reviewed by ICIJ involve deals negotiated by PricewaterhouseCoopers, one of the world’s largest accounting firms, on behalf of hundreds of corporate clients. To qualify the companies for tax relief, the records show, PwC tax advisers helped come up with financial strategies that feature loans among sister companies and other moves designed to shift profits from one part of a corporation to another to reduce or eliminate taxable income.
The records show, for example, that Memphis-based FedEx Corp. set up two Luxembourg affiliates to shuffle earnings from its Mexican, French and Brazilian operations to FedEx affiliates in Hong Kong. Profits moved from Mexico to Luxembourg largely as tax-free dividends. Luxembourg agreed to tax only one quarter of 1 percent of FedEx’s non-dividend income flowing through this arrangement – leaving the remaining 99.75 percent tax-free.
“A Luxembourg structure is a way of stripping income from whatever country it comes from,’’ said Stephen E. Shay, a professor of international taxation at Harvard Law School and a former tax official in the U.S. Treasury Department. The Grand Duchy, he said, “combines enormous flexibility to set up tax reduction schemes, along with binding tax rulings that are unique. It’s like a magical fairyland.”
More than 170 of the Fortune 500 companies have a Luxembourg branch, according to U.S.-based Citizens for Tax Justice, a non-profit research and advocacy group.
Apple has been dominating the news lately with news of all sorts but today we’re looking at the mountain of cash the company is holding overseas. The folks over at Citizens for Tax Justice published a blog post on Friday that combs through the tech company’s annual report filing.
Major U.S. companies have accumulated more than $2 trillion in tax-deferred foreign profits, according to Citizens for Tax Justice, a research group that advocates for closing loopholes. The amount grew by $454 billion from 2010 to 2013.
Believe we’re overtaxed? The Citizens For Tax Justice report that the United States ranks third lowest in taxing its citizens. Only Mexico and Chile rank below us among the 24 countries included in the Organization for Economic Cooperation and Development. Even that conservative deity, President Ronald Reagan, raised taxes 11 times, according to his friend and former Sen. Alan Simpson (R-Wyo.). Simpson was a member of President Obama’s Tax Reform Commission. He is a reminder of a time when Republicans were responsible enough not to spread myths.