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Stop the Offshore Piracy
Ships laden with tens of millions of dollars of American treasure pull into beautiful ports in places like the Cayman Islands and the Bahamas every day, offloading profits made on sales to U.S. consumers. These voyages -- all technically legal -- cost taxpayers $100 billion a year.
Now the corporate captains of these pirate ships have sent Congress an ominous ransom note that says: "Allow us to return these profits to American territory at a deeply discounted tax rate of 5.25 percent, or you'll never see your cash again."
Oct 12, 2011
Ships laden with tens of millions of dollars of American treasure pull into beautiful ports in places like the Cayman Islands and the Bahamas every day, offloading profits made on sales to U.S. consumers. These voyages -- all technically legal -- cost taxpayers $100 billion a year.
Now the corporate captains of these pirate ships have sent Congress an ominous ransom note that says: "Allow us to return these profits to American territory at a deeply discounted tax rate of 5.25 percent, or you'll never see your cash again."
The regular corporate tax rate is 35 percent.
Of course, modern pirates don't need cargo ships. They transmit booty instantaneously via electronic bits to satellite dishes that link the world's 50 tax havens. There, shell-company subsidiaries, often little more than a brass plate on the wall and a post office box, handle the transaction. Ugland House, a non-descript five-story building on Grand Cayman Island, houses nearly 19,000 subsidiaries of the world's largest businesses.
American corporations have stashed more than $1.4 trillion offshore. Much of this loot is reaped from accounting tricks.
Corporate pirates have formed an armada to lobby Congress for the same tax break they got in 2004. That was when they promised to create jobs in exchange for a one-time tax break on repatriated earnings they would return to the United States from abroad.
The sea air must have clouded their memories, for the coalition that calls itself WIN America, is calling for a second "one-time" tax cut, only this time they've made no attempt to promise U.S. jobs or investment. Instead, they're seeking public sympathy for having their profits unfairly trapped offshore. The profits are indeed trapped -- by the greed of corporate leaders eager to deliver every last dime of profits to shareholders. The U.S. tax code isn't to blame.
According to a new Institute for Policy Studies report, "America Loses: Corporations that Take 'Tax Holidays' Slash Jobs," which I co-authored, 58 U.S. corporations that enjoyed 70 percent of the tax breaks from the 2004 tax holiday eliminated nearly 600,000 jobs in the seven years that followed.
Three of the five WIN America companies that break out their U.S. employment data reported that they destroyed more than 25,000 American jobs between 2004 and 2010. Seven of the 18 WIN America members slashed more than 100,000 jobs from global workforces.
The pirates named their lobbying effort WIN America, as if avoiding taxes by shipping profits offshore was somehow patriotic. WIN America has spent $50 million on lobbyists to coax Congress into supporting a repeat of a well-documented policy failure.
Congress should put an end to the piracy that continues to ship U.S. profits abroad to avoid U.S. federal taxes. There's already a bill in Congress to do just that. The Stop Tax Haven Abuse Act would outlaw the fake businesses. It would block the money earned in America from leaving here in the first place.
Tax-dodging corporate pirates shouldn't force U.S. taxpayers and workers to walk the plank.
An Urgent Message From Our Co-Founder
Dear Common Dreams reader, It’s been nearly 30 years since I co-founded Common Dreams with my late wife, Lina Newhouser. We had the radical notion that journalism should serve the public good, not corporate profits. It was clear to us from the outset what it would take to build such a project. No paid advertisements. No corporate sponsors. No millionaire publisher telling us what to think or do. Many people said we wouldn't last a year, but we proved those doubters wrong. Together with a tremendous team of journalists and dedicated staff, we built an independent media outlet free from the constraints of profits and corporate control. Our mission has always been simple: To inform. To inspire. To ignite change for the common good. Building Common Dreams was not easy. Our survival was never guaranteed. When you take on the most powerful forces—Wall Street greed, fossil fuel industry destruction, Big Tech lobbyists, and uber-rich oligarchs who have spent billions upon billions rigging the economy and democracy in their favor—the only bulwark you have is supporters who believe in your work. But here’s the urgent message from me today. It's never been this bad out there. And it's never been this hard to keep us going. At the very moment Common Dreams is most needed, the threats we face are intensifying. We need your support now more than ever. We don't accept corporate advertising and never will. We don't have a paywall because we don't think people should be blocked from critical news based on their ability to pay. Everything we do is funded by the donations of readers like you. When everyone does the little they can afford, we are strong. But if that support retreats or dries up, so do we. Will you donate now to make sure Common Dreams not only survives but thrives? —Craig Brown, Co-founder |
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Scott Klinger
Scott Klinger is researcher with the Program on Inequality at the Institute for Policy Studies (www.inequality.org).
Ships laden with tens of millions of dollars of American treasure pull into beautiful ports in places like the Cayman Islands and the Bahamas every day, offloading profits made on sales to U.S. consumers. These voyages -- all technically legal -- cost taxpayers $100 billion a year.
Now the corporate captains of these pirate ships have sent Congress an ominous ransom note that says: "Allow us to return these profits to American territory at a deeply discounted tax rate of 5.25 percent, or you'll never see your cash again."
The regular corporate tax rate is 35 percent.
Of course, modern pirates don't need cargo ships. They transmit booty instantaneously via electronic bits to satellite dishes that link the world's 50 tax havens. There, shell-company subsidiaries, often little more than a brass plate on the wall and a post office box, handle the transaction. Ugland House, a non-descript five-story building on Grand Cayman Island, houses nearly 19,000 subsidiaries of the world's largest businesses.
American corporations have stashed more than $1.4 trillion offshore. Much of this loot is reaped from accounting tricks.
Corporate pirates have formed an armada to lobby Congress for the same tax break they got in 2004. That was when they promised to create jobs in exchange for a one-time tax break on repatriated earnings they would return to the United States from abroad.
The sea air must have clouded their memories, for the coalition that calls itself WIN America, is calling for a second "one-time" tax cut, only this time they've made no attempt to promise U.S. jobs or investment. Instead, they're seeking public sympathy for having their profits unfairly trapped offshore. The profits are indeed trapped -- by the greed of corporate leaders eager to deliver every last dime of profits to shareholders. The U.S. tax code isn't to blame.
According to a new Institute for Policy Studies report, "America Loses: Corporations that Take 'Tax Holidays' Slash Jobs," which I co-authored, 58 U.S. corporations that enjoyed 70 percent of the tax breaks from the 2004 tax holiday eliminated nearly 600,000 jobs in the seven years that followed.
Three of the five WIN America companies that break out their U.S. employment data reported that they destroyed more than 25,000 American jobs between 2004 and 2010. Seven of the 18 WIN America members slashed more than 100,000 jobs from global workforces.
The pirates named their lobbying effort WIN America, as if avoiding taxes by shipping profits offshore was somehow patriotic. WIN America has spent $50 million on lobbyists to coax Congress into supporting a repeat of a well-documented policy failure.
Congress should put an end to the piracy that continues to ship U.S. profits abroad to avoid U.S. federal taxes. There's already a bill in Congress to do just that. The Stop Tax Haven Abuse Act would outlaw the fake businesses. It would block the money earned in America from leaving here in the first place.
Tax-dodging corporate pirates shouldn't force U.S. taxpayers and workers to walk the plank.
Scott Klinger
Scott Klinger is researcher with the Program on Inequality at the Institute for Policy Studies (www.inequality.org).
Ships laden with tens of millions of dollars of American treasure pull into beautiful ports in places like the Cayman Islands and the Bahamas every day, offloading profits made on sales to U.S. consumers. These voyages -- all technically legal -- cost taxpayers $100 billion a year.
Now the corporate captains of these pirate ships have sent Congress an ominous ransom note that says: "Allow us to return these profits to American territory at a deeply discounted tax rate of 5.25 percent, or you'll never see your cash again."
The regular corporate tax rate is 35 percent.
Of course, modern pirates don't need cargo ships. They transmit booty instantaneously via electronic bits to satellite dishes that link the world's 50 tax havens. There, shell-company subsidiaries, often little more than a brass plate on the wall and a post office box, handle the transaction. Ugland House, a non-descript five-story building on Grand Cayman Island, houses nearly 19,000 subsidiaries of the world's largest businesses.
American corporations have stashed more than $1.4 trillion offshore. Much of this loot is reaped from accounting tricks.
Corporate pirates have formed an armada to lobby Congress for the same tax break they got in 2004. That was when they promised to create jobs in exchange for a one-time tax break on repatriated earnings they would return to the United States from abroad.
The sea air must have clouded their memories, for the coalition that calls itself WIN America, is calling for a second "one-time" tax cut, only this time they've made no attempt to promise U.S. jobs or investment. Instead, they're seeking public sympathy for having their profits unfairly trapped offshore. The profits are indeed trapped -- by the greed of corporate leaders eager to deliver every last dime of profits to shareholders. The U.S. tax code isn't to blame.
According to a new Institute for Policy Studies report, "America Loses: Corporations that Take 'Tax Holidays' Slash Jobs," which I co-authored, 58 U.S. corporations that enjoyed 70 percent of the tax breaks from the 2004 tax holiday eliminated nearly 600,000 jobs in the seven years that followed.
Three of the five WIN America companies that break out their U.S. employment data reported that they destroyed more than 25,000 American jobs between 2004 and 2010. Seven of the 18 WIN America members slashed more than 100,000 jobs from global workforces.
The pirates named their lobbying effort WIN America, as if avoiding taxes by shipping profits offshore was somehow patriotic. WIN America has spent $50 million on lobbyists to coax Congress into supporting a repeat of a well-documented policy failure.
Congress should put an end to the piracy that continues to ship U.S. profits abroad to avoid U.S. federal taxes. There's already a bill in Congress to do just that. The Stop Tax Haven Abuse Act would outlaw the fake businesses. It would block the money earned in America from leaving here in the first place.
Tax-dodging corporate pirates shouldn't force U.S. taxpayers and workers to walk the plank.
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