A very recent report by anti-poverty charity Oxfam claims that despite receiving trillions of dollars in taxpayer support, US corporate giants such as Apple, Walmart and General Electric have stashed $1.4 trillion (£980bn) in tax havens.
Oxfam said that the sum is held in an “opaque and secretive network” of 1,608 subsidiaries based offshore and the amount is larger than the economic output of Russia, South Korea and Spain.
There is intense scrutiny of tax havens following the leak of the Panama Papers and it is in this environment that the charity has made the analysis of the financial affairs of the 50 biggest US corporations.
The “massive systematic abuse” of the global tax system is illustrated by its report titled “Broken at the Top”, the charity organization said.
With some $181bn held offshore in three subsidiaries, at the top of the list prepared by Oxfam sits technology giant Apple, the world’s second biggest company.
Second in the list with $119bn stored in 118 tax haven subsidiaries is the Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing.
The list of the top 10 companies which includes pharmaceuticals giant Pfizer, Google’s parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state, computing firm Microsoft was third with $108bn.
While $1tn was paid in tax by the top 50 US firms between 2008 and 2014, the same companies have held $1.4tn in offshore accounts.
A combined amount of $11.2tn in federal loans, bailouts and loan guarantees during the same period was also enjoyed by the companies, noted the Oxfam report.
The US companies studied in the report had managed to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014 using the parking of money in the tax havens.
Spending of billions on an “army” of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers was helped by this foreign parking of money, the charity said.
Oxfam said that the top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government.
“For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts,” said Oxfam.
“Yet again we have evidence of a massive systematic abuse of the global tax system. We can’t go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill. Governments across the globe must come together now to end the era of tax havens,” said Robbie Silverman, senior tax adviser at Oxfam.
Oxfam said that the tax avoidance by US corporations was fuelling the global wealth divide by draining $100bn from the poorest countries and cost the world’s largest economy some $111bn a year.
“Tax dodging practised by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth,” the report said.
(Source:www.theguardian.com)
Oxfam said that the sum is held in an “opaque and secretive network” of 1,608 subsidiaries based offshore and the amount is larger than the economic output of Russia, South Korea and Spain.
There is intense scrutiny of tax havens following the leak of the Panama Papers and it is in this environment that the charity has made the analysis of the financial affairs of the 50 biggest US corporations.
The “massive systematic abuse” of the global tax system is illustrated by its report titled “Broken at the Top”, the charity organization said.
With some $181bn held offshore in three subsidiaries, at the top of the list prepared by Oxfam sits technology giant Apple, the world’s second biggest company.
Second in the list with $119bn stored in 118 tax haven subsidiaries is the Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing.
The list of the top 10 companies which includes pharmaceuticals giant Pfizer, Google’s parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state, computing firm Microsoft was third with $108bn.
While $1tn was paid in tax by the top 50 US firms between 2008 and 2014, the same companies have held $1.4tn in offshore accounts.
A combined amount of $11.2tn in federal loans, bailouts and loan guarantees during the same period was also enjoyed by the companies, noted the Oxfam report.
The US companies studied in the report had managed to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014 using the parking of money in the tax havens.
Spending of billions on an “army” of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers was helped by this foreign parking of money, the charity said.
Oxfam said that the top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government.
“For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts,” said Oxfam.
“Yet again we have evidence of a massive systematic abuse of the global tax system. We can’t go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to foot the bill. Governments across the globe must come together now to end the era of tax havens,” said Robbie Silverman, senior tax adviser at Oxfam.
Oxfam said that the tax avoidance by US corporations was fuelling the global wealth divide by draining $100bn from the poorest countries and cost the world’s largest economy some $111bn a year.
“Tax dodging practised by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth,” the report said.
(Source:www.theguardian.com)