Skip to main content

Sign up for our newsletter.

Quality journalism. Progressive values. Direct to your inbox.

During a mach on Tax Day, New Yorkers call out the many U.S. corporations who are not paying their fair share. (Photo: Michael Fleshman)

'Huge Number' of Tax-Dodging Corporations Preparing to Expatriate

"In this corner of the tax code, we've gone way past treating corporations like people," said Sen. Elizabeth Warren. "In this corner of the tax code, we treat corporations better than people."

Lauren McCauley

Dozens of major U.S. corporations are preparing to jump ship in a mass wave of tax-dodging corporate expatriation, the Washington Post reported Wednesday.

According to Sen. Charles E. Schumer (D-N.Y.) a "huge number" of companies are currently shifting their headquarters offshore or are contemplating deals to do so thanks to a tax loophole called "corporate inversion."

"They are taking advantage of all the good things that our government helps provide," and then running out on the bill," said Sen. Elizabeth Warren during a speech before the U.S. Senate last week.

Warren was one of three lawmakers who on Tuesday submitted a letter to President Obama urging him to take executive action against these corporate "freeloaders." The group, which also included Sens. Dick Durbin (D-Ill.) and Jack Reed (D-R.I.), warned that the U.S. could lose billions of dollars in tax revenue if the U.S. government does not take action soon. An estimate by the congressional joint Committee of Taxation found that the nation could lose nearly $20 billion over the next decade.

In the past ten years, 47 major corporations have shifted their base abroad—at least on paper—and another dozen have their move in the works. Schumer estimates that there are many more with some "big announcements" expected in August. On Wednesday, Walgreens announced that they were forsaking their plans—which drew huge national condemnation—to relocate to Switzerland.

Whereas the Cayman Islands was once the top destination for expatriation, more recently U.S. companies have been "planting their flags" in Europe, namely Ireland, where the corporate tax rate is roughly 12.5 percent.

As the Post explains, when a U.S. firm moves its tax home to a nation with lower rates, often by merging with or purchasing a foreign company, the company's international earnings are no longer subject to the 35 percent U.S. corporate tax rate; they are taxed at the lower foreign rate.

The Treasury Department is reportedly exploring possible “administrative actions” that could block inversions or “meaningfully reduce” the associated tax benefits. And congressional Democrats are preparing to advance legislation in September that will outlaw the loophole or hinder its profitability.

Meanwhile, Republicans have grabbed on the issue as an opportunity to argue for a lower corporate tax rate.

"For a person who doesn't want to pay a fair share, our message is clear: you can renounce your citizenship, but don't come back and expect the rest of us to pick up your tab," Warren's speech continued. "Corporations can renounce their American citizenship - and make absolutely clear in legal documents that they're doing so to avoid their US tax obligations - and not suffer any consequences."

"In this corner of the tax code, we've gone way past treating corporations like people," she added. "In this corner of the tax code, we treat corporations better than people."

Our work is licensed under Creative Commons (CC BY-NC-ND 3.0). Feel free to republish and share widely.

We've had enough. The 1% own and operate the corporate media. They are doing everything they can to defend the status quo, squash dissent and protect the wealthy and the powerful. The Common Dreams media model is different. We cover the news that matters to the 99%. Our mission? To inform. To inspire. To ignite change for the common good. How? Nonprofit. Independent. Reader-supported. Free to read. Free to republish. Free to share. With no advertising. No paywalls. No selling of your data. Thousands of small donations fund our newsroom and allow us to continue publishing. Can you chip in? We can't do it without you. Thank you.

Ilhan Omar Fends Off Primary Challenger Boosted by Right-Wing PAC Money

"Ilhan Omar has faced some of the ugliest attacks of any elected official and had hundreds of thousands of dollars spent against her," said Sen. Bernie Sanders. "Despite this, she won her primary once again."

Jake Johnson ·

'Let's Send Ron Johnson Packing': Mandela Barnes Wins Wisconsin Senate Primary

"We're going to the Senate to rebuild the middle class," said Barnes. "We're going to protect the right to choose. We're going to fight to make the American Dream an American reality."

Jake Johnson ·

Global Allies Stand With Walden Bello as Social Justice Champion Posts Bail in the Philippines

"Walden Bello's arrest is a violation of his fundamental rights, an affront to the institutions of Philippine democracy, and a threat to free expression everywhere," said the Progressive International council.

Jessica Corbett ·

Team Trump Reportedly 'Bullish' About Exploiting FBI Raid to Win Reelection

One former Trump aide-turned-"Big Lie" detractor said that the Justice Department may have "just handed Trump" the 2024 GOP nomination "or potentially the presidency."

Brett Wilkins ·

Pentagon Contractors in Afghanistan Pocketed $108 Billion Over 20 Years

Military contracting "obscures where and how taxpayer money flows," and "makes it difficult to know how many people are employed, injured, and killed," said the Costs of War Project report's author.

Jessica Corbett ·

Common Dreams Logo