Tax Dodgers cost us $100 Billion a year in lost tax revenues - U.S. Public Research Interest Group

[JohnWxy]

http://cdn.publicinterestnetwork.org/assets/b16ca24832a32d7d08fcfbb224eed3de/USP-Tax-Shell-Game-2010_Final.pdf

1. Introduction

Secrecy in the financial system has many victims, both in the U.S. and abroad. Individuals and
corporations that avoid taxes by using offshore tax havens can count all taxpayers as their
victims.

The Government Accountability Office (GAO), which is an independent, nonpartisan agency that
conducts investigations on behalf of Congress, describes tax havens as places with no or
nominal taxes and little if any reporting requirements. The practice of using offshore tax havens
has flourished in an era of increasing secrecy and dangerous deregulation. Lobbyists for
corporations with offshore tax havens have been able to count on the fact that the missing funds
will never be accounted for. Many of the largest corporations have banded together to fight
reform every step of the way – often with huge war chests. U.S. PIRG identified several large
corporations that happily take taxpayer dollars for government contracts, make heavy use of tax
havens, and then spend lavishly on campaigns and lobbying to resist reform.9

According to the GAO, over 80 percent of the biggest U.S corporations maintain revenues in
offshore tax haven countries.10 The names on the list are familiar: American Express, A.I.G, Boeing, Cisco,
Dow, Hewlett-Packard, J.P. Morgan Chase and Pfizer – among others.

One jurisdiction that has gained notoriety for its willingness to accommodate tax havens is the
Cayman Islands. According to GAO, over 18,000 companies exist in one five-story building in
the Cayman Islands. President Barack Obama, as a candidate in 2008, once remarked, “That's
either the biggest building or the biggest tax scam on record.” 12

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[Bill USA]

1. more ammunition, thanks! recommended.

[vets74]

2. That is the most conservative estimate I have seen. Tip of the iceberg....

The usual guesstimates go to the $500-billion and up range.

The big scams go to such as putting assets under technically non-profit Family Trust shells. These trusts are immune to estate taxes. They do not pay normal taxes in any category.

Another scam is moving assets offshore. Works just like the Family Trust scammeries. From this report:

Tax Shell Game

The IRS estimates that individuals and corporations currently hold $5 trillion in tax haven countries and asserts that the United States is responsible for a large portion of these assets.

Many corporations operating in the United States funnel money through offshore tax havens in order to avoid paying billions in U.S. taxes. In fact, an independent study found that nearly two-thirds of corporations pay no taxes at all. Goldman Sachs, which received a $10 billion taxpayer bailout, managed to get their effective tax rate down to one percent by utilizing maneuvers they describe as “changes in geographic earnings mix.”

Taxpaying households must pick up the tab for the missing revenue to the U.S. Treasury. The avoidance and evasion of taxes for a few becomes the burden for many – and for future generations.

Key Findings

• Offshore tax havens cost taxpayers revenue totaling as much as $100 billion per year - $1 trillion over 10 years. Individuals and corporations based in the U.S. who pay taxes on their revenues must shoulder this burden for those who do not.
• Making up for this lost revenue costs each taxpayer an average of $500 per year. That’s a month’s worth of groceries for an average family of four or a year’s worth of health care for a child.

Recommendation

• Congress should pass legislation to end the use of offshore tax havens and remove this unfair burden from taxpayers.

These estimates from GAO are tiny. Maybe just limited to the Annual Report public information for the 80% listed.

$5-trillion in off-shored holdings does not translate to a $100-billion annual tax differential. No way.

Also, divide that $100-billion by the 110,000,000 Federal Income Tax paying households and you get $900-a-year. Not $500-a-year.

That's not class warfare, it's math.

[JohnWxy]

3. pls provide documentation of the 'usual' $500 Billn estimates of annual lost revenues. I'm always

interested in any info available on this topic.

regarding the $100 Billion lost revenues, from $5 Trillion in assets, not being supportable ... I took $5 Trillion and factored by 15% for EBIT (I figure this is not overly optimistic) and got $750 Billion in $EBIT. Applying a 35% tax rate I get $262.5 Billion in tax liabilities. If you use 15% tax rate that yields tax liabilities of $112.5 Billion.


As I said, I am always interested in information on this topic. So, I'm looking forward to seeing the documentation you provide of the $500 Billion lost tax revenues estimates you referred to.