For more than two months, the nations attention has been focused on the gusher in the Gulf. But theres another offshore disaster that has been going on for at least 50 years. I refer to the large U.S. corporations that have created subsidiaries and headquarters off-shore to avoid U.S. taxes.
But I found it difficult to obtain a list of the companies that have taken advantage of the loophole. Now, thanks to Ariana Huffingtons recent article on the Huffington Post, I have a better idea. In her article, she cited a Government Accounting Office (GAO) report from 2008 that showed 83 of the 100 largest publiclytraded companies in the country had operations in tax havens.
The report cited AIG, AT&T, American Express, Boeing, Chevron, and Dow to name a few. Many set up P.O. boxes in the Caymans and Bermuda. And Halliburton chose to move its headquarters to Dubai. Thats disturbing enough. Yet, according to the GAO, 74 of those 83 corporations received government contracts. And, of course, taxpayers were asked to rescue two of those companies (AIG and American Express) through billions in government loans.
So these companies are not only avoiding paying their fair share of American taxes. They are filling their coffers with money from taxpayers like you and me!
At a time when our national economy is struggling and when were engaged in two protracted wars, closing this gaping loophole would seem one of the top priorities for Congress. But that would mean that our Representatives and Senators would have to vote against some of their largest campaign contributors. Indeed, according to Ariana Huffingtons article, Washington has been trying to address the issue for nearly 50 years. But each time the issue comes before Congress, the corporate lobbyists prevail.
So while Congress debates the impact on the national debt by extending unemployment benefits for working people, they continue to permit corporations to avoid paying billions of dollars in taxes through loopholes. In fact, the latest figures available show that these corporations pay roughly $16 billion in taxes on $700 billion in foreign active earnings a tax rate of approximately 2.3 percent!
Of course, politicians (especially Republicans) excuse such welfare by saying that corporations create jobs, and that jobs have never been more needed than now. That may be true. But where are those jobs being created? For nearly 40 years, many of these corporations have been creating more jobs offshore than in the U.S.
That being the case, what do we have to lose by forcing them to pay up?