New OSPIRG Foundation Study Exposes the Real Cost of Tax Loopholes for Oregon Residents and Small Businesses
With Oregon facing tough budget choices, OSPIRG Foundation, joined by Main Street Alliance, released a new study revealing that the State of Oregon lost an estimated $506 million due to offshore tax dodging in 2012. Many of America’s wealthiest individuals and largest corporations 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 taxpayers twice,” said Celeste Meiffren, Consumer and Taxpayer Advocate with OSPIRG Foundation. “Oregon should be using that money to benefit the public.”
OSPIRG Foundation estimates that in Oregon, $283 million is lost from the corporate abuse of tax havens and $223 million from individuals. By using offshore tax havens, corporations and wealthy individuals shift the tax burden to other taxpayers, forcing elected officials to make up the difference through cutting public services, growing the deficit, or raising taxes on individuals and small businesses.
“Whether it’s in Baker City, Brookings or Bend,” noted Lee Mercer, Director of Main Street Alliance of Oregon, “all I have to do is mention the Cayman Islands for small business owners to vent about how tired they are of picking up the slack for the taxes big corporations aren’t paying.”
77% of small business owners surveyed by Main Street Alliance last fall said that corporations aren’t paying their fair share. And over 80% believe corporate tax loopholes must be closed to increase tax revenues before making further budget cuts.
For context, the estimated $506 million lost in Oregon in 2012 would have been more than enough to cover the record-breaking bond measure that passed in November to upgrade Portland Public Schools, to fully fund Oregon’s share of the Columbia River Crossing, or to give every household in Oregon a check for $335.
All told, state taxpayers across the country lost nearly $40 billion last year from offshore tax loophole abuse. 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 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,” Meiffren added.
States should not wait for federal action to curb tax haven abuse. The study proposes several policy solutions that states should explore, including:
• Decoupling state tax systems from the federal tax system;
• Requiring worldwide combined reporting for multinational corporations;
• Requiring increased disclosure of financial information; and
• Withholding state taxes as part of federal FATCA (Foreign Account Tax Compliance Act) withholding.
Download the report, “The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure from Tax Loophole Abuse,” here: http://www.ospirgfoundation.org/reports/orp/hidden-cost-offshore-tax-havens
Download the Main Street Alliance of Oregon summary brief Taking the Pulse of Oregon Small Business (PDF)
# # #