April, 04 2013, 12:33pm EDT
For Immediate Release
Contact:
Dan Smith, Tax and Budget Advocate, U.S. PIRG
(o) 202-461-3822, dsmith@pirg.org
Â
Offshore Tax Havens Cost Average Taxpayer $1,026 a Year, Small Businesses $3,067
U.S. PIRG, Sen. Levin, Small Business Leaders Release "Picking up the Tab 2013: Average Citizens and Small Business Owners Pay the Price for Offshore Tax Havens"
WASHINGTON
With Tax Day approaching, it's a good time to be reminded of where our tax dollars are going. U.S. PIRG was joined today by Senator Levin (D-MI), Joseph Rotella, the owner of a Massachusetts small business, and Scott Klinger, the Tax Policy Director of the American Sustainable Business Council and Business for Shared Prosperity, to release a new study which revealed that the average taxpayer in 2012 would have to shoulder an extra $1,026 in taxes to make up for the revenue lost due to the use of offshore tax havens by corporations and wealthy individuals. The report also found that the average small business would have to pay $3,067 to cover the cost of offshore tax dodging by large corporations.
"Tax dodging is not a victimless offense. When companies use accounting gimmicks to move their profits to tax haven shell companies, the rest of us have to pick up the tab," said Dan Smith, Tax and Budget Advocate for U.S. PIRG and report co-author. "With the nation facing such serious budget challenges, it's a no-brainer that we need to close these loopholes and stop letting large corporations avoid paying what they should."
Every year, corporations and wealthy individuals avoid paying an estimated $150 billion in taxes by using complicated accounting tricks to shift their profits to offshore tax havens. Of that $150 billion, $90 billion is avoided specifically by corporations.
"As this timely report shows, tax haven abuse takes an immense toll on the vast majority of American taxpayers who don't employ armies of lawyers and accountants to avoid paying the taxes they owe," said Sen. Carl Levin, who has led the fight in Congress against offshore tax dodging and has introduced legislation to close corporate tax loopholes. "We can no longer afford the damage these abuses do to the federal budget, and American families and businesses can't afford to carry the burden of a privileged few who use egregious loopholes to avoid paying taxes. It is time to close these loopholes, reduce the deficit, protect important investments in our future and bring some fairness back to the tax code," he added.
The federal revenue lost to offshore tax havens would be more than enough to cover the automatic federal budget cuts caused by the sequester. A recent U.S. PIRG report also found that offshore tax dodging costs states nearly $40 billion annually, which roughly equals the total amount spent by all state and local governments on firefighters in 2008.
Offshore tax havens also give large multinationals a competitive advantage over responsible small businesses which don't use tax havens and get stuck footing the bill for corporate tax dodging.
"While I'll be paying my taxes - investing in the public infrastructure and services that underpin our economy - many profitable large corporations will be paying a lower tax rate than me or not paying taxes at all," said Joseph Rotella, the owner of Spencer Organ Company, a small business in Waltham, Massachusetts. "That puts small businesses at a competitive disadvantage and undermines our nation," he added.
Scott Klinger, the Tax Policy Director of the American Sustainable Business Council and Business for Shared Prosperity, which represents more than 165,000 business owners throughout the United States, also commented on the report's findings. "Joseph is far from alone in his concern. Using offshore tax loopholes to avoid paying taxes is not a Democrat or Republican issue. It is a serious business issue, and one of great importance to Main Street business owners, regardless of their political affiliation."
Many of America's largest and best-known corporations use complex tax avoidance schemes to shift their profits offshore and drastically shrink their tax bill:
* Pfizer, the world's largest drug maker, made 40 percent of its sales in the U.S. over the past five years, but thanks to their use of offshore tax loopholes they reported no taxable income in the U.S. during that time. The company operates 172 subsidiaries in tax havens and has $73 billion parked offshore which remains untaxed by the U.S., according to its own SEC filing. That is the second highest amount of money sitting offshore for a U.S. multinational corporation.
* Microsoft avoided $4.5 billion in federal income taxes over a three year period by using sophisticated accounting tricks to artificially shift its income to tax-friendly Puerto Rico. Microsoft maintains five tax haven subsidiaries and keeps 70 percent of its cash offshore, a total of $60.8 billion, on which it would otherwise owe $19.4 billion in U.S. taxes.
* Citigroup - a bank that was bailed out by taxpayers during the financial meltdown of 2008 - maintains 20 subsidiaries in tax havens and has $42.6 billion sitting offshore, on which it would otherwise owe $11.5 billion in taxes, according to its own SEC filing. Citigroup currently ranks eighth among U.S. multinationals for having the most money stashed offshore.
"It is appalling that these companies get out of paying for the nation's infrastructure, education system, and security that help make them successful," added Smith.
The report recommends closing a number of offshore tax loopholes. Many of these reforms are included in Senator Levin's Cut Unjustified Tax Loopholes Act (Senate Bill 268).
Download a copy of today's report, "Picking up the Tab: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens."
Download an earlier study showing how offshore tax dodging harms state budgets.
U.S. PIRG, the federation of state Public Interest Research Groups (PIRGs), stands up to powerful special interests on behalf of the American public, working to win concrete results for our health and our well-being. With a strong network of researchers, advocates, organizers and students in state capitols across the country, we take on the special interests on issues, such as product safety,political corruption, prescription drugs and voting rights,where these interests stand in the way of reform and progress.
LATEST NEWS
Green Groups Slam RFK Jr. as 'Dangerous Conspiracy Theorist and Science Denier'
"With so much at stake, we stand united in denouncing RFK Jr.'s false environmentalist claims."
Apr 19, 2024
A dozen national green groups on Friday published an open letter exposing what they say are the dangers of Robert F. Kennedy Jr.'s quixotic Independent U.S. presidential bid by highlighting his embrace of conspiracy theories and his use of language often spoken by climate deniers.
"Robert F. Kennedy Jr. is not an environmentalist. He is a dangerous conspiracy theorist and science denier whose agenda would be a disaster for our communities and the planet," the letter argues. "He may have once been an environmental attorney, but now RFK Jr. is peddling the term 'climate change orthodoxy' and making empty promises to clean up our environment with superficial proposals."
"The truth is, by rejecting science, what he offers is no different than Donald Trump," the signers asserted, referring to the former Republican president and presumptive 2024 GOP nominee.
The letter continues:
In the fact-free world that both he and Trump live in, objective reality simply does not exist. Their policy platforms are instead driven by what will benefit Big Oil and the greedy corporations that fund them. We know, however, that environmental progress depends on following scientific fact and putting people over politics.
With so much at stake, we stand united in denouncing RFK Jr.'s false environmentalist claims. We can't, in good conscience, let him continue co-opting the credibility and successes of our movement for his own personal benefit.
"RFK Jr. is a bleak reminder that our democracy is incredibly vulnerable," the letter adds. "Any support for this Kennedy-in-name-only will inevitably result in a second Trump term and the complete erosion of vital environmental and social gains made to date."
The letter is signed by the Center for Biological Diversity Action Fund, Friends of the Earth Action, LCV Victory Fund, Natural Resources Defense Council Action Fund, Climate Emergency Advocates, Climate Power, Earthjustice Action, Food & Water Action, NextGen America, Sierra Club Independent Action, Sunrise Movement, and 350 Action.
Earlier this month, the Kennedy campaign fired New York state director Rita Palma after she admitted that her "No. 1 priority" is to siphon votes from President Joe Biden—who she described as the "mutual enemy" of both the Kennedy and Trump voter.
Last month, More Perfect Unionreleased a video highlighting the ultrawealthy Republican donors and Trump backers who are also financing Kennedy's White House run, which many observers believe could play spoiler to Biden's reelection bid.
In a stinging rebuke, prominent members of the Kennedy political dynasty reaffirmed their support for Biden on Thursday. Numerous relatives have been urging Kennedy to drop out of the race.
Keep ReadingShow Less
Youth Lead Global Strike Demanding 'Climate Justice Now'
"We are many people and youths who want to express our frustration over what decision-makers are doing right now: They don't care about our future and aren't doing anything to stop the climate crisis," one young activist said.
Apr 19, 2024
Ahead of Earth Day, young people around the world are participating in a global strike on Friday to demand "climate justice now."
In Sweden, Greta Thunberg joined hundreds of other demonstrators for a march in Stockholm; in Kenya, participants demanded that their government join the Fossil Fuel Non-Proliferation Treaty; and in the U.S., youth activists are kicking off more than 200 Earth Day protests directed at pressing President Joe Biden to declare a climate emergency.
"We're gathered here to fight, once again, for climate justice," Thunberg toldAgence France-Presse at the Stockholm protest, which drew around 500 people. "It's now been more than five and a half years that we've been doing the same thing, organizing big global strikes for the climate and gathering people, youths from the entire world."
"I lost my home to climate change. Now I'm fighting so that others don't lose their homes."
The first global youth climate strike, which grew out of Thunberg's Fridays for Future school strikes, took place on March 15, 2019. Since then, both emissions and temperatures have continued to rise, with 2023 blowing past the record for hottest year. Yet, according to Climate Action Tracker, no country has policies in place that are compatible with limiting global heating to 1.5°C above preindustrial levels.
"We are many people and youths who want to express our frustration over what decision-makers are doing right now: They don't care about our future and aren't doing anything to stop the climate crisis," Karla Alfaro Gripe, an 18-year-old participant at the Stockholm march, told AFP.
The global strikes are taking place under the umbrella of Friday's for Future, which has three main demands: 1. limit temperature rise to 1.5°C, 2. ensure climate justice and equity, and 3. listen to the most accurate, up-to-date science."Fight with us for a world worth living in," the group wrote on their website, next to a link inviting visitors to find actions in their countries.
Participants shared videos and images of their actions on social media.
European strikers also gathered in London, Dublin, and Madrid.
In Asia, Save Future Bangladesh founder Nayon Sorkar posted a video from the Meghna River on Bangladesh's Bola Island, where erosion destroyed his family's home when he was three years old.
"I lost my home to climate change," Sorkar wrote. "Now I'm fighting so that others don't lose their homes."
Also in Bangladesh, larger crowds rallied in Dhaka, Sylhet, Feni, and Bandarban for climate action.
"Young climate activists in Bandarban demand a shift to renewable energy and away from fossil fuels," said Sajjad Hossain, the divisional coordinator for Youthnet for Climate Justice Bangladesh. "We voiced urgency for sustainable energy strategies and climate justice. Let's hold governments accountable for a just transition!"
In Kenya, young people struck specifically to demand that the government sign on to the Fossil Fuel Non-Proliferation Treaty.
"As a member of the Lake Victoria community, the importance of the treaty in our climate strikes cannot be overstated," Rahmina Paullette, founder of Kisumu Environmental Champions and a coordinator for Fridays for Future Africa, said in a statement. "By advocating for its implementation, we address the triple threat of climate change, plastic pollution, and environmental injustice facing our nation."
"Halting fossil fuel expansion not only safeguards crucial ecosystems but also combats the unjust impacts of environmental degradation, ensuring a more equitable and sustainable future for our community and the wider Kenyan society," Paullette said.
In the U.S., Fridays for Future NYC planned for what they expected to be the largest New York City climate protest since September 2023's March to End Fossil Fuels. The action will begin at Foley Square at 2:00 pm Eastern Time, at which point more than 1,000 students and organizers are expected to walk across the Brooklyn Bridge to rally in front of Borough Hall.
The strike "is part of a national escalation of youth-led actions in more than 200 cities and college campuses around the country, all calling on President Biden to listen to our generation and young voters, stop expanding fossil fuels, and declare a climate emergency that meaningfully addresses fossil fuels, creating millions of good paying union jobs, and preparing us for climate disasters in the process," Fridays for Future NYC said in a statement.
The coalition behind the climate emergency drive, which also includes the Sunrise Movement, Fridays for Future USA, and Campus Climate Network, got encouraging news on Wednesday when Bloomberg reported that the White House had reopened internal discussions into potentially declaring a climate emergency.
"We're staring down another summer of floods, fires, hurricanes, and extreme heat," Sunrise executive director Aru Shiney-Ajay said in a statement. "Biden must do what right Republicans in Congress are unwilling to do: Stand up to oil and gas CEOs, create green union jobs, and prepare us for climate disasters. Biden must declare a climate emergency and use every tool at his disposal to tackle the climate crisis and prepare our communities to weather the storm. If Biden wants to be taken seriously by young people, he needs to deliver on climate change."
The coalition is planning events leading up to Monday including dozens of Earth Day teach-ins beginning Friday to encourage members of Congress to pressure Biden on a climate emergency and Reclaim Earth Day mobilizations on more than 100 college and university campuses to demand that schools divest from and cut ties with the fossil fuel industry.
Keep ReadingShow Less
Ahead of Plastics Treaty Summit, Studies Make Case for Stopping Pollution at the Source
"Whether the treaty includes plastic production cuts is not just a policy debate," said one expert. "It's a matter of survival."
Apr 19, 2024
As worldwide government officials, civil society groups, and activists prepare to head to Ottawa, Canada for the fourth session of Global Plastics Treaty negotiations, climate advocates urged attendees to keep in mind the new findings of scientists who showed Thursday that plastic production—not waste—is the main driver of the synthetic substances' planet-heating emissions.
The federally funded Lawrence Berkeley National Laboratory in Berkeley, California released a paper showing that the greenhouse gas emissions of the plastics industry are equivalent to those of about 600 coal-fired power plants and are four times higher than those of the airline sector.
Lobbyists for the plastics industry, along with countries that are home to the world's biggest fossil fuel polluters, have pushed for a plastics treaty that centers waste management and a "circular economy" in which waste plastic is used indefinitely to produce new synthetic products.
But the Lawrence Berkeley scientists found that 75% of the greenhouse gas emissions caused by plastics are released before the plastic compounds are even created by the polymerization process.
"Plastics' impact on the climate starts with extraction," said the Global Alliance for Incinerator Alternatives (GAIA) in a policy brief on the lab's findings. "To fully capture, measure, evaluate, and address the impacts of plastic pollution, assessment, and regulatory controls must consider the complete lifecycle, beginning with extraction."
According to Lawrence Berkeley's research, if plastic production remains at its current level, it could burn through roughly one-fifth the planet's remaining carbon budget, pushing the Earth closer to planetary heating that exceeds 1.5°C.
"To avoid breaching the 1.5°C limit set by the Paris [climate] agreement," said GAIA, "primary plastic production must decrease by at least 12% to 17% per year, starting in 2024."
To achieve that goal, said the Center for Financial Accountability on Thursday, fossil fuel-producing countries must stop treating the Global Plastics Treaty "as a waste management treaty."
"While global leaders are trying to negotiate a solution to the plastic crisis, the petrochemical industry is investing billions of dollars in making the problem rapidly worse," said GAIA science and policy director Neil Tangri, a senior fellow at University of California, Berkeley. "We need a global agreement to stop this cancerous growth, bring down plastic production, and usher in a world with less plastic and less pollution."
At the third session of the the Intergovernmental Negotiating Committee (INC-3) last year, 143 plastics industry lobbyists registered to attend, prompting advocates to call for their exclusion from future summits.
On Sunday, ahead of the meetings set to take place from April 23-29, the Break Free From Plastic movement is planning to march through Ottawa, to demand "strong conflict of interest policies that protect the treaty negotiations and its implementation from the vested interests of industries that are profiting" from the growing plastic pollution crisis.
The campaigners will also demand a negotiation process that respects the rights of Indigenous people, a treaty that supports "non-toxic reuse systems" and rejects a "circular economy" model, and limiting and reducing plastic production a "non-negotiable requirement to end plastic pollution."
Dr. Jorge Emmanuel, a co-author of GAIA's policy brief and a research fellow at Siliman University in the Philippines, said the climate impacts that have already hit his country illustrate the need for a strong Global Plastics Treaty.
"The Philippines is on the frontlines of both climate change and plastic pollution," said Emmanuel. "Heatwaves, powerful typhoons, and flooding are getting worse, and the petrochemical industry has displaced our traditional systems with mountains of plastic that poison our communities."
"Whether the treaty includes plastic production cuts is not just a policy debate," he added. "It's a matter of survival."
Keep ReadingShow Less
Most Popular