Corporations can’t have their cake and eat it too.
Right now, corporations are making billions of dollars off of you and me, and are hiding those billions in offshore bank accounts to avoid paying taxes to our government.
But what if we closed the tax loopholes that allow corporations to skip out on paying taxes, and brought those trillions of dollars back home?
Some states are already doing that, and they’re seeing some pretty amazing results.
Back in 2003, the Montana state legislature closed that state’s tax loophole, a so-called “water’s edge” loophole, that allowed companies to avoid state taxes by hiding their profits in offshore bank accounts.
In the decade since, Montana has brought in over $40 million, which is a lot considering that state only spends about $1.8 billion each year.
Last summer, Oregon jumped on the bandwagon, and closed a similar tax loophole. The state now expects to bring in an additional $17 million in tax revenue from corporations this year alone.
And, a new report by the U.S. Public Interest Research Group (U.S. PIRG) found that if 21 other states and the District of Columbia had closed their offshore corporate tax-evading loopholes, they would have brought in over $1 billion in additional tax revenue in 2012.
Now just imagine what would happen if the federal government took similar actions, and closed corporate tax loopholes that allow giant transnational corporations like Apple to hide billions in profits overseas.
According to Apple, the giant tech company paid around $6 billion in taxes in 2012, and will probably pay around $7 billion in taxes for 2013.
But as multiple tax experts and lawmakers have said, Apple should be paying a lot more in taxes to our government.
After all, it’s one of America’s most profitable companies. In 2013 alone, it took home $37 billion in profits on $171 billion in revenue.
So, how is Apple making so much, but paying so little in taxes to support our nation?
It’s hiding a lot of its money offshore.
Apple has a bunch of subsidiaries in Ireland for example, where that company has a maximum tax rate of just 2%, compared to the 35% maximum tax rate for corporations in the U.S.
It funnels money through those subsidiaries, so that it never touches U.S. shores, and can’t be taxed.
According to reports, between 2009 and 2012, Apple hid at least $74 billion in profits from U.S. taxes by using those Irish subsidiaries.
And as CNN Money points out, Apple keeps its profits offshore for as long as possible, because companies owe U.S. tax on profits when they bring them back from overseas.
The moment that money comes back to the United States, Apple would have to pay the U.S. corporate tax on it minus any foreign taxes already paid.
Right now, Apple has around $102 billion held in offshore bank accounts, and the company has said that it doesn’t plan to bring that money back to the U.S. anytime soon.
As Senator Carl Levin put it, “Apple sought the Holy Grail of tax avoidance. It has created offshore entities holding tens of billions of dollars while claiming to be a tax resident nowhere.”
Of course Apple isn’t the only giant corporation hiding billions of dollars overseas.
Hundreds of corporations are exploiting those same corporate tax loopholes to avoid paying taxes to our government.
A report from Citizens for Tax Justice found that 30 corporations on the Fortune 500 list each paid zero in income taxes between 2008-2010, even though they made over $180 billion collectively.
But what if we closed those loopholes, shut down offshore banking operations, and forced corporations to pay taxes on all of their profits?
According to the Stop Tax Haven Abuse Act, proposed last September by Senators Carl Levin, Mark Begich, Shelden Whitehouse, and Jeanne Shaheen, closing offshore corporate tax loopholes would provide nearly $220 billion in additional tax revenues over the next decade.
Back in the 1950’s and 1960’s, when American businesses were doing just fine, corporate tax revenue was about 6% of GDP. Today, it’s just over 1% of GDP.
It’s time to return to corporate tax policies that work for both business and America.
If multi-billion dollar corporations like Apple want to make money off We The People, then they should be paying taxes to the U.S.
They can’t have it both ways. They can’t get rich off of us, and then screw us.
Working-class Americans shouldn’t have to face the burden of corporate tax loopholes that are letting corporations off the hook.
Let’s bring those offshore trillions back home, and start rebuilding the American economy.