Deirdre Cummings
Legislative Director, MASSPIRG
617-747-4319
[email protected]
Legislative Director, MASSPIRG
617-747-4319
[email protected]
MASSPIRG Education Fund
MASSPIRG’s Deirdre Cummings (center) releases new report revealing that MA lost
$1.6 billion due to off-shore tax dodging. Small businessmen Jeff Barry (left),
President and Founder of Boston Organics, a food delivery service in Charlestown
and Joseph Rotella (right), owner of Spencer Organ Company , an organ restoration
and repair company in Waltham look at findings at today’s press conference in Boston.
BOSTON – With Massachusetts in the midst of a budget crisis, MASSPIRG, joined by business leaders and elected officials, released a new study revealing that Massachusetts lost $1.6 billion due to offshore tax dodging in 2012. Many of America’s wealthiest individuals and largest corporations, including Wells Fargo, Citigroup, McDonalds, Target, Costco, Exxon Mobil, Intel, Coca-Cola and Sears use tax loopholes to shift profits made in America to offshore tax havens, where they pay little to no taxes.
“Tax dodging is not a victimless offense. When corporations skirt taxes, the public is stuck with the tab. And since offshore tax-dodgers avoid both state and federal taxes, they hurt everyday taxpayers twice,” said Deirdre Cummings, Tax and Budget Policy Director for MASSPIRG Education Fund. “Massachusetts should be using that money to benefit the public.”
All told, state taxpayers across the country lost nearly $40 billion last year from offshore tax loophole abuse. To put that amount in context, $40 billion roughly equals the total amount spent by all state and local governments on firefighters in 2008. It’s also enough money to cover the educational costs for 3.7 million children for one full year.
The $1.6 billion lost in Massachusetts in just the last year would have been enough to:
“Taxes are not just numbers in spreadsheets,” said Joseph Rotella, owner of Spencer Organ Company http://www.spencerorgan.com/index in Waltham. “Taxes provide the revenues that pay for roads, bridges, public safety, public schools, public transportation and other infrastructure and services my business and my customers count on. We need to stop the tax haven abuse that lets big corporations avoid paying their fair share and gives them an unfair advantage in the marketplace.”
“Small businesses like my own have plenty of challenges to become successful,” said Jeff Barry, President and Founder of Boston Organics http://www.bostonorganics.com/, an organic food delivery company in Charlestown. “Having to pay more in taxes because others pay less should not be one of them.”
Congressman Michael Capuano, Somerville, a cosponsor of the Stop Tax Haven Abuse Act (H.R. 2669) said, “This report makes clear that ordinary taxpayers and small businesses are burdened by the use of offshore tax havens. It’s long past time to close the loopholes that allow large corporations to avoid paying their fair share of taxes. The use of these tax havens means that there is less money available for the needs of our state and country, from education to infrastructure improvements.”
Tax havens are used by both wealthy individuals and corporations. In Massachusetts $1.24 billion is lost from the corporate abuse of tax havens and $439 million from individuals.
As of 2008, at least 83 of the top 100 publicly traded corporations in the U.S. used tax havens, according to the Government Accountability Office. At the end of 2011, 290 of the top Fortune 500 companies reported that they collectively held a staggering $1.6 trillion offshore. By using offshore tax havens, corporations and wealthy individuals shift the tax burden to ordinary Americans, forcing us to make up the difference through cutting public services, growing our already big deficit, or raising taxes on everyday citizens.
At the national level, offshore tax loopholes cost federal taxpayers $150 billion each year, which would be more than enough to cover the scheduled spending cuts that are set to take effect in just a few weeks.
“Some budget decisions are tough, but closing the offshore tax loopholes that let large companies shift their tax burden to the rest of us is a no-brainer,” Cummings added.
Here are some increasingly notorious ways that some of America’s largest corporations drastically shrink their tax bill:
Congressmen Michael Capuano, Somerville; William Keating, Quincy; Edward Markey, Malden; James McGovern, Worcester; Nicola Tsongas, Lowell; and John Tierney, Salem, have all cosponsored the Stop Tax Haven Abuse Act (H.R.2669) filed last session.
You can download the report, “The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure from Tax Loophole Abuse,” here: http://masspirgedfund.org/sites/pirg/files/reports/Hidden_Cost_of_Offshore_Tax_Havens_MA_13.pdf