Via the alumni newsletter of Law@Stanford we were led to the YouTube video on American corporate offshore untaxed profits, as Stanford's Joseph Bankman (Ralph M. Parsons Professor of Law and Business) is interviewed at KQED News. Law@Stanford writes:
"Professor Joseph Bankman discusses the practice by some American companies of holding an estimated total of 2.1 trillion dollars in profits offshore to avoid paying taxes."The interview points to the Bay area companies Apple, Cisco, Google, Hewlett-Packard, Oracle, Chevron, and Intel, but the scope of the problem is much larger, as a study of Fortune 500 companies proves.
The organization Citizens for Task Justice has recent financial figures at the .pdf Offshore Shell Games 2015: The Use of Offshore Tax Havens by Fortune 500 Companies, October, 2015. The recommendations made there are by the U.S. Public Interest Research Group Education Fund and Citizens for Tax Justice. The Executive Summary provides inter alia as follows:
"U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to the tax code. Rather than paying their fair share, many multinational corporations use accounting tricks to pretend for tax purposes that a substantial portion of their proﬁts are generated in offshore tax havens, countries with minimal or no taxes where a company’s presence may be as little as a mailbox. Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year.What are the individuals in the current group of Presidential election candidates going to do about this problem and why is this matter of tax inequality not a central question directed to them during the televized debates?
Congress, by failing to take action to end this tax avoidance, forces ordinary Americans to make up the difference. 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.
This study examines the use of tax havens Fortune 500 companies in 2014. It reveals that tax haven use is ubiquitous among America’s largest companies and that a narrow set of companies beneﬁts disproportionately.
Most of America’s largest corporations maintain subsidiaries in offshore tax havens. At least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries in tax haven jurisdictions as of the end of 2014."