Report: Reining in Wall Street
Tax Shell Game
The IRS estimates that individuals and corporations currently hold $5 trillion in tax haven countries and asserts that the United States is responsible for a large portion of these assets.
Many corporations operating in the United States funnel money through offshore tax havens in order to avoid paying billions in U.S. taxes. In fact, an independent study found that nearly two-thirds of corporations pay no taxes at all. Goldman Sachs, which received a $10 billion taxpayer bailout, managed to get their effective tax rate down to one percent by utilizing maneuvers they describe as “changes in geographic earnings mix.”
Taxpaying households must pick up the tab for the missing revenue to the U.S. Treasury. The avoidance and evasion of taxes for a few becomes the burden for many – and for future generations.
Key Findings
· Offshore tax havens cost taxpayers revenue totaling as much as $100 billion per year - $1 trillion over 10 years. Individuals and corporations based in the U.S. who pay taxes on their revenues must shoulder this burden for those who do not.
· Making up for this lost revenue costs each taxpayer an average of $500 per year. That’s a month’s worth of groceries for an average family of four or a year’s worth of health care for a child.
Recommendation
· Congress should pass legislation to end the use of offshore tax havens and remove this unfair burden from taxpayers.
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Priority Action
The CUT Loopholes Act would put an end to the price and profit shifting that allows publicly traded companies to engage in pervasive tax avoidance.
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