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Report: CT loses $600M in tax revenue when corporations shift profits

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.”

See the complete story at CT News Junkie.

 

Comments

7 responses to “Report: CT loses $600M in tax revenue when corporations shift profits”

  1. Don’t Panic

    How about disclosing the names of these tax deadbeats so we can boycott their services. I bet they are among thoise proudly touting themselves to be job creators in the state of CT.

  2. DJ

    Check Gail Lavielle’s rolodex…

  3. John Hamlin

    This is a problem with the U.S. tax code — reform the code and companies will repatriate their overseas cash in an instant — and pay taxes on it here and spend it in the U.S. — but Congress won’t reform the tax code, and so this problem simply will continue — and other countries will continue to get that tax revenue and that investment. How stupid are we, anyway?

  4. John Hamlin

    Here are links to several articles that discuss this problem — many multinationals keep their foreign profits overseas — and revising the tax code so it is consistent with the treatment provided by other countries on this issue would make sense. It’s really a question of whether we want the money invested here or would prefer to see it invested overseas. It’s not a question of patriotism. It’s a question of duty to shareholders. Reform the tax code!

    http://www.reuters.com/article/2014/04/09/us-usa-tax-offshore-idUSBREA3729V20140409

    http://www.huffingtonpost.com/2012/03/19/apple-us-tax-law_n_1362934.html

  5. Oldtimer

    Can’t help wondering if some of the money saved by avoiding taxes goes to congressman, one way or another, to prevent any serious tax reform.

  6. One and Done.

    Tax avoidance is perfectly legal and everyone’s civic duty to starve the beast.
    .
    Reducing the corporate tax rate to zero would lower prices of consumer goods and increase salaries for the middle class according to most economists. This is proven in countries who have worked to reduce and/or eliminate it all together.
    .
    When you get down to it, the corporate tax is merely passed on to consumers where it can’t be paid for by labor.
    .
    The capital creation and economic activity would be recouped by the government in the form of income taxes paid by individuals actually working and doing things as a result of their higher wages and increased purchasing power.
    .
    The reality is there are special interests who want to keep it the way it trending which is lower wages and higher prices. This greed mechanism is what is fueling what we have in place right now. Recall then Senator Obama said he was going to take public financing. His first out and out lie and one we are paying for dearly right now. The top hedge fund managers and corporate elitists who have bankrolled his existence are perfectly happy with the way things are and is the reason why Obama has done zero, zilch, nada on tax reform other than to blame congress for everything like the true leader he is all while taking money left and right from the same “fat cats” he pretends to be against in the name of fairness.

  7. So? Wutcha gonna do about it?

    The Ugland House, home to, check this,
    19,000 corporations, including most all
    big name US blue chips, like GE, which
    is supposed to be have it’s headquarters
    in Fairfield.
    Operation Caymans
    https://www.youtube.com/watch?v=AXK90PacpJA

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