Tuesday, March 12, 2013

Corporations Avoiding Billions In Taxes

This is something that will (or at least should) make you mad as you start to prepare your own taxes. While you pay your taxes as you are supposed to, following the law, the huge corporations in this country are hiding much of their income in other countries -- just so they don't have to pay any American taxes on it. And many of these companies have opened an office in some of those countries (like the Cayman Islands or Bermuda) just for the purpose of tax evasion.

And we're not talking about small amounts of money either. The Wall Street Journal and the Bloomberg News, both conservative business-oriented news organizations, have come up with some figures showing how pervasive this hiding of profits has become.

The Wall Street Journal says that the largest 60 American corporations moved about 40% of their total profits offshore last year (approximately $166 billion dollars) simply to avoid paying taxes on it. That's a pretty hefty chunk. Imagine how much better your own tax bill would look if you could get away with hiding 40% of your income, and only paying taxes on the other 60%!

Bloomberg found a similar thing when they looked at offshore tax evasion. They found 83 corporations that had moved $183 billion offshore just in the last lear. These 83 corporations are now sitting on at least $1.46 trillion dollars in those offshore accounts -- successfully avoiding tens of billions of dollars in both federal and state taxes. If those corporations had just paid their fair share of taxes, the sequester would never have had to happen.

This also exposes another lie that corporations (and their Republican puppets) have been telling Americans -- that the corporations can't afford to create jobs because their taxes are too high. The truth is that the trillions of dollars they have stuffed overseas could have been brought back and used to create jobs (which would then be an expense which taxes wouldn't be paid on), but they didn't. That's because they know that low taxes don't help job creation (and high taxes don't hurt it). Jobs are created only when businesses need to hire to meet increasing demand.

Of course, they are still telling the lie. In the last Congress, the Republican tried to create a "tax holiday" for the corporations -- allowing them to bring that offshore money back and not pay any tax on it (or only pay a tiny tax). They claim it will allow them to create jobs. We know better. It will just let them fatten their bank accounts without paying taxes -- something the middle and working classes would never be allowed to do.

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