A recent
report by Citizens
for Tax Justice (CTJ) shows how offshore cash holdings by
American companies is becoming an even bigger issue than it was just one year
ago.
Ten major American corporations,
primarily in the technology and pharmaceutical sectors, have increased their
offshore profit holdings by $5 billion or more in the last year alone as
shown on this list:
In total, these ten corporations
have added $106.6 billion to their offshore holdings. Most of these
profits were earned in the United States but have been shifted to offshore tax
havens to keep their American corporate tax burden to a minimum.
Not only have these ten companies
added over $100 billion to their offshore holdings, an additional 92 of the
Fortune 500 companies have increased their offshore profit holdings by at least
$500 million each for an additional total of $229 billion.
Over the past four years, 48 American corporations have added at least $3
billion to each of their offshore cash piles for a grand total of $518 billion.
Current laws prevent the U.S.
government from taxing these so-called foreign profits and it is estimated that
this "oversight" will cost the federal government an estimated $600 billion over the next
decade as shown in this Joint Committee Report from the Staff of the
Joint Committee on Taxation.
From CTJ, here is a listing of the unrepatriated foreign
profits from 20 of the top Fortune 500 corporations between 2009 and 2011:
That's pretty much a "who's
who" of the American corporate world, isn't it?
Note that the top 20 companies hold
a total of $793.6 billion in offshore profits and the remaining 300 of the
Fortune 500 companies that disclose holding at least some profits overseas hold
an additional total of $794.3 billion for a grand total of $1.588 trillion. What's
interesting to see is that General Electric heads the list; its CEO, Jeffery R. Immelt, just happens to be the head of Barack
Obama's President's Council on Jobs and Competitiveness whose
responsibilities included the following:
1.
Solicit ideas from across the country about how to bolster the
economy and the prosperity of the American people that can inform the decision
making of the President;
2.
Report directly to the President on the design, implementation,
and evaluation of policies to promote the growth of the American economy,
enhance the skills and education of Americans, maintain a stable and sound
financial and banking system, create stable jobs for American workers, and
improve the long term prosperity and competitiveness of the American people;
and
3.
Provide analysis and information with respect to the operation,
regulation, and healthy functioning of the economy and other factors that may
contribute to the sustainable growth and competitiveness of American industry
and the American labor force.
So, how's that working
out for Main Street America?
In an odd twist of
fate, in mid-February 2013, GE announced "furloughs" for roughly
500 factory
workers at its much ballyhooed Appliance Park facility in Louisville, citing sluggish appliance sales.
Striking how many Democrat supporters are on the list. Is it possible they perpetuate the Democratic image of hypocrisy? Although GE is a leading example of hypocrisy, there is also Google, Apple, Citigroup, Microsoft, Cisco....... Sadly, the useful idiots can't connect the dots.
ReplyDeleteWe’re all idiots, we have a two party system that is broke and prevents a 3rd party from rising to challenge the status quo. Both parties on a national level are bought out by special interests the biggest special interest are large corporations who back both parties so it really doesn’t matter who wins the big corporations have them in their pocket. It’s funny that biggest challenge to this was the Tea Party but their views on things are so racist and backwards, they will never be more than a group within the Republican Party. I urge anyone that reads this please support a third party. Do some research and find which third party supports your views the best and vote for them in the next election. Unless you are in charge or some other really high level position at a Fortune 500 company neither party will have your interests at heart.
ReplyDeleteWhat if they also bought out the 3rd party? What we need is to educate American public and run campaign to expose these companies' unfair and unpatriotic scheme.
DeleteThis explains why we constantly face trade and budget deficits for decades. These companies outsource to China and other developing countries and have their products made there. Then, their subsidiaries in tax haven countries sell their products directly from China to other foreign countries without going through US export. Only a portion of output sends back to US for consumption without import duty. It's time for the congress to close the loopholes and US government to enforce the laws. Otherwise, other US companies will do the same to avoid tax. The damages to our economy is undoubtedly tremendous: high unemployment, degradation of middle class, high trade deficit, ... all of this will lead to less revenue, more government spending (to care for the unemployed) and persistent budget deficit. This kind of unpatriotic unAmerican unfair practice got to be ended, the quicker the better.
"If you build it, they will come." The US tax code, known principally for its Rube Goldberg approach to taxation, makes it perfectly legal for corporations to keep taxable income offshore. If they did otherwise, they would likely get sued for dereliction of fiduciary duty. The question is how do you write a tax code that makes US corporations competitive on the world stage, and second, gives back to society some of what society enables corporations to do (power, water, streets, police, etc.)? The debate now is centered around how can we get more money from corporations for the government to spend. This is a road to nowhere.
ReplyDeleteJust change the law. It is very simple!
ReplyDeleteHow much of this goes back to American shareholders in dividends? We saw how Apple borrowed money in America to pay its dividends, which must indicate something important about the tax system and when one compares what the government spends overseas particularly on the military it's a bit like the pot calling the kettle black on who is more concerned about the economy.
ReplyDelete