Offshore Tax Havens Cost Average California Taxpayers $423 a Year, Each California Small Business $2,010
With tax day approaching, a new study released by CALPIRG found that the average California taxpayer in 2011 would have to shoulder an extra $423 tax burden to make up for revenue lost from corporations and wealthy individuals shifting income to offshore tax havens. The report additionally found that to cover the cost of the corporate abuse of tax havens in 2011, small businesses in California would have to foot a bill of over $2,010 on average.
Every year, corporations and wealthy individuals avoid paying an estimated $100 billion in taxes by shifting income to low or no tax offshore tax havens. Of that $100 billion, $60 billion in taxes are avoided specifically by corporations. A GAO study found that at least 83 of the top 100 publically traded corporations use offshore tax havens.
Using complex tax avoidance schemes, many of America’s largest corporations drastically shrink their tax bill:
- Google uses techniques nicknamed the “double Irish” and the “Dutch sandwich,” involving two Irish subsidiaries and one in Bermuda – a tax haven – that helped shrink its tax bill by $3.1 billion between 2008 and 2010.
- Wells Fargo paid no federal income taxes between 2008 and 2010 despite being profitable all three years in part due to its use of 58 offshore tax haven subsidiaries.
- G.E. received a $3.3 billion profit in 2010 despite reporting over $5 billion in U.S. profits to shareholders. The company has $94 billion parked offshore and uses 14 tax haven subsidiaries.
- It is appalling that these companies get out of paying for the nation’s infrastructure, education system, security, and large market that help make them successful.