The latest leak of 13.4 million documents from an offshore law firm exposes the tax avoidance gimmicks used by multinational corporations to avoid taxes in the U.S. The “Paradise Papers” were released today by the International Consortium of Investigative Journalists (ICIJ), the group that was also responsible for the “Panama Papers” investigation in 2016. The leaked documents include information on the offshore tax planning schemes used by multinational companies to lower their tax liability.
U.S. PIRG tax and budget advocate Michelle Surka made the following statement on the leaks:
“The Paradise Papers provide a peek behind the curtain at just how multinational corporations and very wealthy individuals use tax havens to game the system and avoid U.S. taxes. We already know that corporate tax haven abuse costs the U.S. over $100 billion a year. This rampant tax avoidance puts domestic businesses at a significant competitive disadvantage and hurts ordinary Americans in the form of higher taxes, more national debt, and cuts to public programs.
“These latest leaks suggest how nonsensical some corporation’s “tax planning” strategies really are, with billions of dollars booked as corporate earnings in countries that often have a GDP smaller than most U.S. states. These companies aren’t doing business in the countries to which they are booking their profits– they are merely building a corporate presence out of paperwork and P.O. Boxes in order to avoid their taxes.
“The Paradise Papers should serve as an important reminder to Congress: any changes to our tax code must first and foremost close tax haven loopholes that have allowed this practice to continue for decades. Debate and discussion on the House Tax Cuts and Jobs Bill, and the upcoming Senate tax bill, should include how this tax overhaul can address the issues raised by the Paradise Papers, and ensure that tax haven loopholes are closed for good.”
U.S. PIRG will continue to analyze the Paradise Papers as more information is made available.
Read ICIJ coverage of the Paradise Papers here.
Read more about offshore tax haven abuse in Offshore Shell Games 2017.