CTJ in the News

New York Times: Businesses Are Winning Cat-and-Mouse Tax Game

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By David Gelles

A pharmaceutical company moved its headquarters to Ireland, sharply reducing its tax rate. A billboard company reclassified itself as a real estate concern, meaning it will no longer pay corporate taxes. And a big oil producer split itself in two, cleaving off a multibillion-dollar division that now operates tax-free.

Across corporate America, companies large and small are finding new ways to address one of the business world’s oldest irritations: paying taxes.

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Much of the tax avoidance comes as multinational corporations take advantage of overseas subsidiaries to shuffle money, intellectual property and assets into lower-taxed jurisdictions. In 2010, a majority of overseas profits reported by American firms were recorded in just 12 low-tax countries like the Netherlands, Bermuda, and Ireland, according to Citizens for Tax Justice.

Delaware County Times: Congressmen Discuss Reforming U.S. Tax Code

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Congressmen Pat Meehan and Jim Gerlach voiced support for reforming the U.S. Tax Code and lowering the 35 percent federal corporate tax rate during a Wednesday panel discussion hosted by the Boeing Co.

“We’ve watched the United Kingdom and Ireland and neighbors Mexico and Canada all reduce rates — Canada’s is as low as 15 percent,” said Meehan, R-7, of Upper Darby, adding that U.S. companies are “competing on an unequal field” in the global marketplace.

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Citizens for Tax Justice, a tax policy research and advocacy group in Washington, D.C., said Boeing was one of 26 Fortune 500 companies that paid no corporate taxes between 2008 and 2012.

“From 2003 to 2012, Boeing received $1.8 billion in federal income tax rebates on its $35 billion in U.S. profits,” CTJ said in a November press release.

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Rolling Stone: The Biggest Tax Scam Ever

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"The things these companies are doing, 20 years ago would almost certainly have been illegal," says Bob McIntyre, president of Citizens for Tax Justice. "But now you've got so many big, powerful corporations doing it that it's the norm." Systematic avoidance helps explain why corporate income taxes – one-third of federal revenue in the 1950s – have now dropped below 10 percent of Treasury receipts today.

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CNN: Blame Burger King deal on Congress, not Warren Buffett

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

Some have suggested boycotting the fast food chain, while others have directed their anger toward the billionaire investor Warren Buffett, whose company Berkshire Hathaway is partly financing the deal.

The real culprits are members of Congress, who have failed to close these loopholes and have allowed Burger King to claim that it is becoming a foreign corporation for tax purposes even when common sense tells us it is as American as any company could be.

"Americans are rightly angry that Burger King plans to use its merger with the Canadian doughnut and coffee chain Tim Hortons to claim Canadian citizenship, probably as a way to avoid paying U.S. taxes -- which the burger chain denies. But Burger King is the latest company to undergo an inversion, which happens when an American company uses a merger to reincorporate as a foreign one.

Some have suggested boycotting the fast food chain, while others have directed their anger toward the billionaire investor Warren Buffett, whose company Berkshire Hathaway is partly financing the deal.

The real culprits are members of Congress, who have failed to close these loopholes and have allowed Burger King to claim that it is becoming a foreign corporation for tax purposes even when common sense tells us it is as American as any company could be."

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The Independent: Burger King buys Tim Hortons - The 'hypocrisy' of Warren Buffett

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Steve Wamhoff, of  Citizens for Tax Justice, could be just such a lobbyist. He says Burger King and its backers’ claims their deal is not about tax “is one of the biggest whoppers we’ve heard about corporate inversions”.  He adds: “The bottom line is this: it’s insulting that the company intends to continue profiting by selling a quintessentially American product to US consumers but then pretend to be Canadian when the time comes to pay taxes.”

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The Guardian: Burger King acquires Tim Hortons and calls Obama's bluff over tax

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"Many US corporations have complained loudly about US tax rates, even though it’s rare that they pay the full burden of 35% to 39%. Out of the Fortune 500 of prominent US companies, 288 paid an effective US federal tax rate of just 19.4% between 2008 and 2012, according to advocacy group Citizens for Tax Justice."

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New Republic: The Burger King Backlash Could Hurt the Republican Party

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By Danny Vinik

Call it the Burger King backlash. On Sunday night, the Wall Street Journal reported that the fast food giant was looking to buy Tim Hortons, the Canadian coffee and donut chain, in the latest bid by an American firm to escape the U.S. corporate tax system. By Monday morning, the company was facing a public relations crisis.

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As Steve Wahmoff, the legislative director at Citizens for Tax Justice, told me in May, “It’s still the same American company, it just gobbled up some smaller company.”

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Forbes: Whopper? Microsoft Skirts Billions In Taxes, Google, HP & Apple Have It Their Way Too

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By Robert W. Wood

With all the talk about inversions and America’s Burger King Going Canadian, it’s easy to ignore even more prevalent tax savings by numerous American companies. Take Microsoft, which admits in its 2014 SEC filing that it avoids $30 billion in U.S. taxes. The trick? Keep about triple that amount, $93 billion in Microsoft’s case, outside the U.S., says The International Business Times.

Microsoft is hardly alone.

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A Citizens for Tax Justice (CTJ) report says from 2007 to 2013, Microsoft increased its money offshore from $6.1 billion to $76.4 billion. The Senate’s Permanent Subcommittee on Investigations explained in a 2012 report that Microsoft uses Singapore, Puerto Rico, Bermuda and Ireland to handle its funds. That report cited other companies using tax shelters, including Apple, General Electric, Pfizer, Johnson & Johnson, Google and Exxon Mobil.

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CNBC: Burger King Deal Could Be a Tax Whopper

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By John W. Shoen

Burger King's move to acquire the Canadian restaurant chain Tim Hortons would give the U.S. fast food giant a major presence north of the border.

It would also save the company a whopper of a tax bill.

The deal would be the latest in a once-obscure tax dodge known as a corporate "inversion" that is turning the debate over U.S. tax reform upside down.

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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.

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CFO Magazine: Microsoft Loads Up Its Offshore Cash Stash

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According to a May 2014 Citizens for Tax Justice report, Fortune 500 companies at that time had some $2 trillion in offshore accounts that allowed them to save $550 billion in taxes.

The biggest U.S.-based stockpiler of cash outside the United States is believed to be Apple, which disclosed last September that it had $137.7 billion in offshore cash. Citizens for Tax Justice noted that General Electric has $110 billion of such cash, Pfizer $69 billion, Cisco $48 billion, Hewlett-Packard $38 billion, Google $39 billion and Oracle $26 billion, based on each company’s latest annual report as of May.”

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