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Published Wednesday, the report--Corporate Pirates of the Caribbean (pdf)--by the Institute for Policy Studies reveals that group member corporations could gain as much as $173 billion in "windfalls" should Congress adopt the group's proposal for a "territorial" tax system.
This reform--a centerpiece of "Fix the Debt" co-founders Erskine Bowles and Alan Simpson's recent deficit reduction proposal--would increase incentives to exploit tax havens by permanently exempting US corporations' foreign earnings from US federal income taxes.
"These Fix the Debt corporations are like modern day pirates," says report co-author Scott Klinger. "Their crews are not sword-wielding ruffians, but high-priced lobbyists and accountants who fight for, win, and then exploit loopholes in the tax code that allow them to avoid paying their fair share of the tax burden."
Under the current tax code, the report explains, US-headquartered corporations are required to pay a tax rate of 35 percent on their profits, regardless of where in the world those profits are earned. However, those corporations are given "full credit" for any taxes paid to foreign governments and "any profits deemed permanently reinvested offshore" are exempt from US taxes until and unless they are returned to the US.
Thus, if a corporation is able to shift their overseas profits to a country where corporate profits are lightly taxed and the taxes paid there are "permanently exempted"--as would be the case under the territorial tax system--the change would be "enormously profitable" for those companies raking in offshore profits.
Some of the major findings of the report include:
"If these corporate CEOs were serious about strengthening the American economy, they wouldn't be seeking more tax breaks that will only add to the national deficit," adds report co-author Sarah Anderson.
IPS released the report one day ahead of House Ways and Means Committee hearing scheduled Thursday to examine multinational corporations' use of low- or no-tax countries to shift profits offshore to avoid paying U.S. taxes.
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Trump and Musk are on an unconstitutional rampage, aiming for virtually every corner of the federal government. These two right-wing billionaires are targeting nurses, scientists, teachers, daycare providers, judges, veterans, air traffic controllers, and nuclear safety inspectors. No one is safe. The food stamps program, Social Security, Medicare, and Medicaid are next. It’s an unprecedented disaster and a five-alarm fire, but there will be a reckoning. The people did not vote for this. The American people do not want this dystopian hellscape that hides behind claims of “efficiency.” Still, in reality, it is all a giveaway to corporate interests and the libertarian dreams of far-right oligarchs like Musk. Common Dreams is playing a vital role by reporting day and night on this orgy of corruption and greed, as well as what everyday people can do to organize and fight back. As a people-powered nonprofit news outlet, we cover issues the corporate media never will, but we can only continue with our readers’ support. |
Published Wednesday, the report--Corporate Pirates of the Caribbean (pdf)--by the Institute for Policy Studies reveals that group member corporations could gain as much as $173 billion in "windfalls" should Congress adopt the group's proposal for a "territorial" tax system.
This reform--a centerpiece of "Fix the Debt" co-founders Erskine Bowles and Alan Simpson's recent deficit reduction proposal--would increase incentives to exploit tax havens by permanently exempting US corporations' foreign earnings from US federal income taxes.
"These Fix the Debt corporations are like modern day pirates," says report co-author Scott Klinger. "Their crews are not sword-wielding ruffians, but high-priced lobbyists and accountants who fight for, win, and then exploit loopholes in the tax code that allow them to avoid paying their fair share of the tax burden."
Under the current tax code, the report explains, US-headquartered corporations are required to pay a tax rate of 35 percent on their profits, regardless of where in the world those profits are earned. However, those corporations are given "full credit" for any taxes paid to foreign governments and "any profits deemed permanently reinvested offshore" are exempt from US taxes until and unless they are returned to the US.
Thus, if a corporation is able to shift their overseas profits to a country where corporate profits are lightly taxed and the taxes paid there are "permanently exempted"--as would be the case under the territorial tax system--the change would be "enormously profitable" for those companies raking in offshore profits.
Some of the major findings of the report include:
"If these corporate CEOs were serious about strengthening the American economy, they wouldn't be seeking more tax breaks that will only add to the national deficit," adds report co-author Sarah Anderson.
IPS released the report one day ahead of House Ways and Means Committee hearing scheduled Thursday to examine multinational corporations' use of low- or no-tax countries to shift profits offshore to avoid paying U.S. taxes.
_____________________
Published Wednesday, the report--Corporate Pirates of the Caribbean (pdf)--by the Institute for Policy Studies reveals that group member corporations could gain as much as $173 billion in "windfalls" should Congress adopt the group's proposal for a "territorial" tax system.
This reform--a centerpiece of "Fix the Debt" co-founders Erskine Bowles and Alan Simpson's recent deficit reduction proposal--would increase incentives to exploit tax havens by permanently exempting US corporations' foreign earnings from US federal income taxes.
"These Fix the Debt corporations are like modern day pirates," says report co-author Scott Klinger. "Their crews are not sword-wielding ruffians, but high-priced lobbyists and accountants who fight for, win, and then exploit loopholes in the tax code that allow them to avoid paying their fair share of the tax burden."
Under the current tax code, the report explains, US-headquartered corporations are required to pay a tax rate of 35 percent on their profits, regardless of where in the world those profits are earned. However, those corporations are given "full credit" for any taxes paid to foreign governments and "any profits deemed permanently reinvested offshore" are exempt from US taxes until and unless they are returned to the US.
Thus, if a corporation is able to shift their overseas profits to a country where corporate profits are lightly taxed and the taxes paid there are "permanently exempted"--as would be the case under the territorial tax system--the change would be "enormously profitable" for those companies raking in offshore profits.
Some of the major findings of the report include:
"If these corporate CEOs were serious about strengthening the American economy, they wouldn't be seeking more tax breaks that will only add to the national deficit," adds report co-author Sarah Anderson.
IPS released the report one day ahead of House Ways and Means Committee hearing scheduled Thursday to examine multinational corporations' use of low- or no-tax countries to shift profits offshore to avoid paying U.S. taxes.
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