( This is a synopsis of an article published in Rolling Stone on September 11, 2014 by Tim Dickinson. Exact quotes and figures can be found there.) I think that everyone has heard of offshore accounts and corporate tax evasion...but Im not sure how many know just how huge the problem is becoming. Many of Americas top corporations are avoiding BILLIONS of dollars in taxes by moving and hiding profits overseas...and it is all perfectly legal! Congress is rewarding them, of course, because of the revolving door between DC and Wall Street. A legal loophole in American tax law allows companies with just 20 percent foreign ownership to reincorporate abroad. It works like this... A big US firm, say APPLE (which is quite good at it), acquires a smaller company located in a TAX HAVEN, such as Ireland, Switzerland, Liechtenstein, or the tiny island of Jersey. The big company then inverts itself...it becomes a subsidiary of the smaller, foreign-based affiliate. The big firm, in effect, renounces its US citizenship and gets rid of a huge share of its IRS obligations. Shareholders will continue to control 80 percent of the company, still managed in the USA, but tax returns will now be filed in the haven, reducing its effective tax rate from 22 to 13 percent. This money is then lost to the US Treasury and from US, the American people. No wonder our bridges are crumbling, deficit is growing, schools are decaying, elderly are suffering, etc etc. Over the next ten years, corporate inversions could cost us nearly $20 BILLION. The newest wave of inversions is threatening to hollow out the US corporate income tax base. Companies striking deals to become technically foreign can be found in every corner of American business...big tech and Pharma are best at it. The core of these firms hardly changes...they just pay much less tax. President Obama says it is legal, but wrong; he say these companies do not want to give up the advantages of operating in the USA, but are too greedy to pay for them. His hands are tied by a gridlocked, corrupted Congress. But inversions are just the tip of the iceburg. The crisis of corporate tax avoidance is even more pervasive and destructive. The worlds richest corporations will get away with fleecing hundreds of BILLIONS of dollars from the rest of us. Concentrated wealth is buying the political agenda it likes and blocking ones it doesnt. There is little difference between Democratic and Republican proposals to fix the problem...surprise, surprise. At this time, corporate profits and corporate tax collections are trending in OPPOSITE directions. Whereas profits were UP $93 BILLION last year, to a high of $2.1 trillion(greater than the GDP of Russia). corporations paid $15 BILLION LESS in taxes!! How is this even possible? The top names in American business have joined the greatest tax dodge in world history. By using clever accounting games, these corporations have siphoned staggering sums of money into tax haven shell countries...where the IRS cant touch them. More than $2 Trillion worth of profits sits in offshore accounts altogether....including about $500 billion in unpaid taxes to the American people. And every year this is allowed to continue equals $90 BILLION lost to the 99.9%. In short, the wealthy are bleeding us all dry. If you are having a hard time, you are not alone. THEY want us to believe we are bad with our money, that the system is fair, the laws are just. Bullshit. They steal from us every time we work for them or we buy their goods or services. And neither a Dem or a GOP President can stop them. Only WE can stop it...by banding together and saying NO to the system!! In every little, unique way we can, this is our only option...we are the modern- day slaves yearning for freedom from the cruel master...the 1%. May we all be brave and creative.
Posted on: Mon, 29 Sep 2014 22:33:39 +0000
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