April 12, Eau Claire – With tax day approaching, a new study released by WISPIRG found that the average Wisconsin taxpayer in 2011 would have to shoulder an extra $372 tax burden to make up for revenue lost from corporations and wealthy individuals shifting income to offshore tax havens. The report additionally found that the average additional tax burden shouldered by Wisconsin small businesses added up to $2,165 due to the “offshoring” of profits by large corporations.
Every year, corporations and wealthy individuals avoid paying an estimated $100 billion in taxes by shifting income to low or no tax offshore tax havens. Of that $100 billion, $60 billion in taxes are avoided specifically by corporations. A GAO study found that at least 83 of the top 100 publicly traded corporations use offshore tax havens.
“When corporations shirk their tax burden by using accounting gimmicks to stash profits legitimately made in the U.S. in offshore tax havens like the Caymans, the rest of us must pick up the tab,” said Bruce Speight, WISPIRG Director. “Responsible small businesses don’t just foot the bill for corporate tax dodging, they are put at a competitive disadvantage since they can’t hire armies of well-paid lawyers and accountants to use offshore tax loopholes.”
WISPIRG was joined by Rick Jurmain, Co-Owner and Board Member of Realityworks and an Eau Claire business leader. “Fighting big corporate tax avoidance is an honored American tradition. The original Boston Tea Party was a protest against tax breaks bribed from the British Crown by the East India Company. Wisconsin led the reform against the Robber Barons in the early 1900s. And now it’s time to do it again. Every century or so big business gets uppity and buys the government. Americans must remind big business that the only true power is We The People, not We The Corporations,” proclaimed Jurmain.
The report recommends closing a number of offshore tax loopholes, many of which are included in the Stop Tax Haven Abuse Act (H.R. 2669) and Cut Unjustified Tax Loopholes Act (S.2075). Rep. Ron Kind has not signed on as a supporter of this bill.
“We have asked Rep. Kind to support the Stop Tax Havens Abuse Act and he has not signed on,” continued Speight. “Rep. Kind should stand up for Wisconsin taxpayers and small business owners and co-sponsor this bill.”
Using complex tax avoidance schemes, many of America’s largest corporations drastically shrink their tax bill:
• Google uses techniques nicknamed the “double Irish” and the “Dutch sandwich,” involving two Irish subsidiaries and one in Bermuda – a tax haven – that helped shrink its tax bill by $3.1 billion between 2008 and 2010.
• Wells Fargo paid no federal income taxes between 2008 and 2010 despite being profitable all three years in part due to its use of 58 offshore tax haven subsidiaries.
• G.E. received a $3.3 billion in tax refunds in 2010 despite reporting over $5 billion in U.S. profits to shareholders. The company has $94 billion parked offshore and uses 14 tax haven subsidiaries.
“It is appalling that these companies get out of paying for the nation’s infrastructure, education system, security, and large market that help make them successful,” added Speight.
Click here to see an earlier study showing 30 companies that paid more in campaign contributions and lobbying expenses than they did in federal income taxes.
WISPIRG, the Wisconsin Public Interest Research Group, is a non-profit, non-partisan public interest advocacy organization that takes on powerful interests on behalf of its members, working to win concrete results for our health and well-being.