The tax bill just approved by Congress was a golden opportunity to solve these problems for good—but turned out to be a colossal missed opportunity. Instead of addressing the hundreds of billions in lost federal tax revenue due to offshore tax avoidance schemes, the Trump-GOP tax bill would forgive most of the taxes owed on the profits held offshore right now and open the floodgates to even more offshore profit-shifting in the future.
Richard Phillips
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blog December 19, 2017 The Trump-GOP’s Big Giveaway to Multinational Corporations
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report December 16, 2017 Multinational Corporations Would Receive $413 Billion in Tax Breaks from Congressional Repatriation Proposal
Rather than making companies pay what they owe, the final legislation reported out of conference proposes to tax accumulated offshore earnings at a rate lower than the 35 percent that they owe under current law. The final bill would tax offshore earnings being held as cash at a rate of 15.5 percent and tax all other offshore earnings at a rate of 8 percent. According to the Joint Committee on Taxation, this proposal would allow U.S. companies to collectively pay about $339 billion in taxes on their offshore earnings, rather than the roughly $752 billion that they owe, meaning that this proposal would give U.S. multinationals a tax break of $413 billion.
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blog November 21, 2017 The Senate Tax Plan’s Big Giveaway to Multinational Corporations
Instead of addressing the hundreds of billions in lost federal tax revenue due to offshore tax avoidance schemes, the Senate tax bill would forgive most of the taxes owed on these profits and open the floodgates to even more offshore profit-shifting in the future.
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blog November 8, 2017 House Tax Plan Would Make Offshore Tax Avoidance Substantially Worse
The Sunday release of the Paradise Papers has once again brought the issue of offshore tax avoidance to the forefront of public discussion. The papers expose the complex structures that companies such as Apple and Nike have pursued in recent years to pay little to nothing in taxes on their offshore earnings.
Yet even as these revelations make headlines, House Republicans are moving forward with major tax legislation, the Tax Cuts and Jobs Act, that would reward the worst tax avoiders and make it even easier for multinational companies to avoid taxes.
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report November 5, 2017 American Corporations Tell IRS that 61 Percent of Their Offshore Profits Are in 10 Tax Havens
Recent revelations that a Bermuda law firm helped facilitate offshore tax avoidance has heightened awareness of the vast amount of income and wealth flowing into tax and secrecy havens worldwide. The countries through which this firm helped funnel global elites’ assets also act as tax havens for multinational corporations. Recently released data from the Internal Revenue Service show that U.S. corporations claim that 61 percent of their foreign subsidiaries’ pretax worldwide income is being earned in 10 tiny tax haven countries.
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report November 5, 2017 Fact Sheet: Nike and Tax Avoidance
Nike earned more than $10 billion in U.S. profits from 2008 to 2015 but only paid 18.6 percent in U.S. federal taxes during this time. This is just over half of the official U.S. corporate tax rate of 35 percent.
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report November 5, 2017 Fact Sheet: Facebook and Tax Avoidance
Since Facebook became a public company, its annual revenues have increased by 250 percent from around $8 billion in 2013 to nearly $28 billion last year. In the same time period, the company’s before-tax profits shot up four-and-a-half fold to $12.5 billion. But in this time it has also managed to avoid billions of dollars in U.S. taxes.
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report November 5, 2017 Fact Sheet: Apple and Tax Avoidance
Apple is the most valuable public company of all time with a market value of more than $800 billion. Last year, it cleared $45.7 billion[iii] in profits after taxes, making it the most profitable company in the Fortune 500 for the third straight year.
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report November 3, 2017 9 Things You Should Know About the Tax Debate
A Chart Book on the U.S. Tax System
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blog October 30, 2017 The Manufacturing Deduction Is a Case Study in Tax Policy Gone Wrong
When you think of manufacturing, what comes to mind? According to the U.S. Congress, manufacturing may include things like the production of wrestling-rated films, assembling bouquets of flowers and even slicing cheesecake. These unusual definitions of manufacturing come from the domestic production activities deduction (better known as the manufacturing deduction), a tax break Congress created to encourage manufacturing in the United States.
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report October 26, 2017 The Domestic Production Activities Deduction: Costly, Complex and Ineffective
When the Domestic Production Activities Deduction (DPAD) became law in 2004, proponents described it as a way to help American companies manufacture in the United States and export products abroad. In recent years, the DPAD has grown into one of the largest corporate tax expenditures, with an estimated cost of more than $15 billion in 2016 and $174 billion over the next 10 years.
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blog October 19, 2017 The Dishonest Pitch for Trump-GOP Tax Cuts
Real tax reform would mean raising more revenue to make public investments and increasing the progressivity of the tax code. Many conservatives strongly disagree with this and insist that a substantial tax cut for the wealthiest Americans will grow the economy.
Rather than engage in this policy debate based on policy ideals and principles, President Trump, other White House officials and GOP leaders have peppered their sales pitch for tax cuts with false claims about the amount of taxes that Americans pay and the effect the current GOP tax proposal would have on the tax system.
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blog October 18, 2017 The Corporate Tax Code is in Dire Shape, But Trump-GOP Plan Would Make It Worse
Just how bad has the corporate tax code gotten? The newest edition of Offshore Shell Games, a joint report by the Institute on Taxation and Economic Policy (ITEP) and U.S. PIRG, outlines the massive scale of the offshore tax avoidance undertaken by U.S. multinationals. It’s well known that Fortune 500 companies have accumulated a stash of $2.6 trillion in earnings offshore, which has allowed them to avoid an estimated $752 billion in taxes.
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report October 17, 2017 Offshore Shell Games 2017
This study explores how in 2016 Fortune 500 companies used tax haven subsidiaries to avoid paying taxes on much of their income. It reveals that tax haven use is now standard practice among the Fortune 500 and that a handful of the country’s biggest corporations benefit the most from offshore tax avoidance schemes.
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blog August 4, 2017 Trump Administration May Make Corporate Inversions Great Again
During the presidential campaign, Donald Trump called out companies engaging in corporate inversions saying that one proposed inversion was “disgusting” and that “politicians should be ashamed” for allowing it to happen. Despite this rhetoric, the Trump Administration is considering rolling back critical anti-inversion rules as part of its broad regulatory review of recently issued Treasury Department regulations.
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blog July 6, 2017 Why We Need to End the Era of Anonymous Shell Corporations
What do terrorists, opioid and human traffickers, corrupt government officials and tax evaders have in common? They all depend on the secrecy provided by anonymous shell corporations to allow them to finance and profit from their crimes. Momentum is building in the House and Senate to pass legislation that would strike against illicit finance in the United States and around the world by bringing an end to the anonymity provided by U.S. incorporation.
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blog June 23, 2017 Inverter Mylan Finds Yet Another Way to Avoid Taxes
Rather than being known for its pioneering pharmaceuticals, Mylan is increasingly becoming infamous for its pioneering tax avoidance strategies. In 2015, Mylan used an inversion to claim that it is now based in the Netherlands for tax purposes. It is a Dutch company only on paper because ownership of the company was mostly unchanged and it continues to operate largely out of the United States. This maneuver has allowed the company to avoid millions in taxes on its earnings in the U.S. and abroad.
But that’s not the end of Mylan’s innovation when it comes to tax planning. A new report by Reuters found that Mylan is using a surprising new technique for dodging taxes: investing in coal refineries.
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blog June 12, 2017 The Best Way to Radically Simplify Tax Filing
One of the supposed selling points of the House GOP’s “Better Way” tax plan is that it will make the tax system so simple that you could do your taxes on a postcard. The reality, however, is that their promised postcard is a deception that would require numerous additional pages of worksheets to fill out. A better solution to making tax preparation simpler is called “return-free filing.” It does not just reduce your work to filling out a postcard, it could eliminate it altogether.
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blog June 2, 2017 What a Populist Budget Proposal Really Looks Like
A truly populist budget would seek to ensure that middle- and low-income families have the resources that they need to get ahead, that the wealthy and corporations are paying their fair share in taxes, and that our country is making the public investments we need to ensure full employment and improve productivity over the long term. The Congressional Progressive Caucus’s (CPC) 2018 budget proposal would make real progress on all of these fronts.
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blog May 25, 2017 Congressional Hearing Highlights Problems with the Border Adjustment Tax
The debate over the so-called border adjustment tax (or BAT) took center stage this week when the House Ways and Means Committee held its first hearing on the topic. Despite strong support by the House Republican leadership and the Chairman of the Ways and Means Committee, Rep. Kevin Brady, the proposal faced an onslaught of criticism during the hearing from invited witnesses and members of both parties.
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blog May 24, 2017 23 Million Uninsured Americans Is Too Great a Cost to Finance Tax Cuts for the Rich
The cost to give $1 trillion in tax cuts to the wealthy and corporations is 23 million uninsured Americans by 2026. This is the bottom-line take away from the much-awaited Congressional Budget Office (CBO) score of the American Health Care Act, which House Republicans rushed through the chamber and narrowly passed (217-213) in early May.
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blog May 18, 2017 Tax Avoiding Companies Well Represented at Tax Reform Hearing
Today the House Ways and Means Committee will hold its first tax reform hearing of 2017, which marks the official opening of the tax reform debate in Congress. True tax reform, if the committee sought to achieve it, could create more jobs and ensure companies are paying their fair share by cracking down on the massive offshore tax avoidance that companies engage in. Unfortunately, the panel of witnesses for today’s hearing is largely made up of representatives of various major corporations that are beneficiaries of the loopholes in our current corporate tax laws. Given this, it seems likely that these panelists will not push for a fairer corporate tax code, but rather a code that allows them to avoid even more taxes and incentivizes moving more jobs offshore.
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blog May 9, 2017 Representative John Delaney’s Bills Take the Wrong Approach on Funding Infrastructure
Lawmakers across the political spectrum recognize the need for additional spending to maintain and upgrade our nation’s transportation infrastructure. According to the Federal Highway Administration, there is a backlog of… -
blog May 2, 2017 Critical Anti-Tax Evasion Legislation Under Attack
The Foreign Account Tax Compliance Act – or FATCA – is a financial disclosure and transparency law designed to crack down on international tax evasion by U.S. taxpayers who hold… -
report May 2, 2017 Foreign Account Tax Compliance Act (FATCA): A Critical Anti-Tax Evasion Tool
For years, a subset of the well-to-do and well-connected have been able to exploit the intricacies of our global financial system to shelter their income and investments from taxation. The U.S. government took a stand against this type of willful tax evasion with the passage of the Foreign Account Tax Compliance Act – or FATCA – enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act of 2010.