HARTFORD, Conn. –Seventy two percent of Fortune 500 companies avoid approximately $90 billion in taxes by booking profits to subsidiaries registered in offshore tax havens, according to a report from the ConnPIRG Education Fund and Citizens for Tax Justice. Each year, offshore tax loopholes used by U.S. multinational corporations cost Connecticut $600 million in state tax revenue.
These companies maintain a collective 7,827 tax haven subsidiaries, with 64 percent of the companies stashing their revenue in either Bermuda or the Cayman Islands. With profits safely holed up in territories where taxes are either not levied or eradicated, American multinationals are able to effectively sidestep their own country’s taxation system.
This year, 55 out of the 362 companies publicly disclosed the amount that they were withholding from the nation. According to the report, these companies would collectively owe $147.5 billion in additional federal taxes — the equivalent of the entire state budgets of California, Indiana and Virginia combined.
“Congress has left loopholes in our tax code that allow this tax avoidance, which forces ordinary Americans to make up the difference,” the report states. “Every dollar in taxes that corporations avoid by using tax havens must be balanced by higher taxes on individuals, cuts to public investments and public services, or increased federal debt.”
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