Big money. Two trillion dollars. If you could touch it, it would reach...oh, I dunno, I'm not going to tell you how high that stack would go and, actually, the point is, you can't touch it: it's stashed overseas. In corporate bank accounts. But, here's the beauty: if you want to know what it feels when the Fortune 500 fleece the country to the tune of $550 billion in dodged taxes on that $2 trillion hiding in foreign bank accounts, just pull out your billfold...empty...well, that's cuz the tab for that fleecing is on YOU.
So, first, the thievery, courtesy of Citizens for Tax Justice:
American Fortune 500 corporations are likely saving about $550 billion by holding nearly $2 trillion of “permanently reinvested” profits offshore. Twenty-eight of these corporations reveal that they have paid an income tax rate of 10 percent or less to the governments of the countries where these profits are officially held, indicating that most of these profits are likely in offshore tax havens.
While congressional hearings over the past few years have focused attention on the tax avoidance strategies of technology corporations like Apple and Microsoft, this report shows that a diverse array of companies are using offshore tax havens, including U.S. Steel, the pharmaceutical giant Eli Lilly, the apparel manufacturer Nike, the supermarket chain Safeway, the financial firm American Express, and banking giants Bank of America and Wells Fargo.[emphasis added]
Staggering:
These 28 companies are not alone in shifting their profits to low-tax havens—they’re only alone in disclosing it. A total of 301 Fortune 500 corporations have disclosed, in their most recent financial reports, holding some of their income as “permanently reinvested” offshore profits. At the end of 2013, these permanently reinvested earnings totaled a whopping $1.95 trillion. (A full list of these 301 corporations is published as an appendix to this paper.) Yet the vast majority of these companies — 243 out of 301 —decline to disclose the U.S. tax rate they would pay if these offshore profits were repatriated. (58 corporations, including the 28 companies shown on this page, disclose this information. A full list of the 58 companies is published as an appendix to this paper.) The non-disclosing companies collectively hold $1.4 trillion in unrepatriated offshore profits at the end of 2013.
And:
It’s impossible to know precisely how much income tax would be paid, under current tax rates, upon repatriation by the 243 Fortune 500 companies that have disclosed holding profits overseas but have failed to disclose how much U.S. tax would be due if the profits were repatriated. But if these companies paid the same 28 percent average tax rate as the 58 disclosing companies, the resulting one-time tax would total $403 billion for these 243 companies. Added to the $148 billion tax bill estimated by the 58 companies who did disclose, this means that taxing all “permanently reinvested” foreign income of the 301 companies at the current federal tax rate could result in more than $550 billion in added corporate tax revenue.
Because a lot of these corporations don't want to tell the whole story:
■ General Electric disclosed holding $110 billion offshore at the end of 2013. GE has subsidiaries in the Bahamas, Bermuda, Ireland and Singapore, but won’t disclose how much of its offshore cash is in these low-tax destinations. [Some of it is clearly there; see text box below.]
■ Pfizer has subsidiaries in Bermuda, the Cayman Islands, Ireland, the Isle of Jersey, Luxembourg and Singapore, but does not disclose how much of its $69 billion in offshore profits are stashed in these tax havens.
■ Merck has12 subsidiaries in Bermuda alone. It’s unclear how much of its $57 billion in offshore profits are being stored (for tax purposes) in this tiny island.
So, while apologists for corporations will say they are just playing by the rules, the truth is that this is broad thievery at many levels. These corporations essentially take a whole raft of services funded by taxpayers--a regulated stock market, roads, schools, communications systems and on and on--make huge profits and, then, run away from paying for those services.
That is stealing.
And the tab for that theft is being paid by every hard-working American.