Close Corporate Tax Loopholes

PERVASIVE TAX AVOIDANCE— Legislative Director Deirdre Cummings presents the MASSPIRG Education Fund's Picking up the Tab 2015 report with Representative Josh Cutler (Duxbury) and Senator Mark Montigny (New Bedford), chief sponsors of a bill that would help close these corporate tax loopholes that cost Bay Staters $2.9 billion last year.

LOOPHOLES COST Bay Staters $2.9 BILLION

No company should be able to game the tax system to avoid paying what it legitimately owes. And, yet, establishing shell companies in offshore havens for the purpose of tax avoidance is becoming more the rule than the exception for at least 83 of the nation's top 100 publicly traded companies. GE, Google, Goldman Sachs and dozens of others have created hundreds of phantom entities with nothing more than a clever tax attorney and P.O. box.

The official estimate of how much Americans lose in tax revenue last year is $110 billion. That's money that is shouldered by average taxpayers, either through additional taxes today or additional debt to be paid by the next generation.

It’s not illegal, but it’s not right.

The result? The average Massachusetts small business would need to pay $4,031 to make up for the $110 billion that G.E. and others using offshore tax havens skipped out on - making it difficult for them, and larger companies that don’t use these schemes, to compete with those that do.

Meanwhile, the Massachusetts Legislature and Congress are considering deep cuts for essential public programs—from education, to health care, to clean air and drinking water. They’re asking us to tighten our belts and make sacrifices, while giving the tax haven crew a free ride.

A better solution? Require companies to treat profits made in Massachusetts and funneled to known tax havens like the Cayman Islands as domestic taxable income. MASSPIRG is working hard to pass a state bill, An Act closing a corporate tax haven loophole, sponsored by Representative Josh Culter (Duxbury) and Senator Mark Montgny (New Bedford) and co-sponsored by a bipartisan group of 54 legislators, that would do just that -- saving Massachusetts taxpayers $79 million a year.

Issue updates

Report | MASSPIRG Education Fund | Tax

Following the Money 2016

 

State governments spend hundreds of billions of dollars each year through contracts for goods and services, subsidies to encourage economic development, and other expenditures. Public accountability helps ensure that state funds are spent as wisely as possible.

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Report | For Immediate Release | Tax

SETTLING FOR A LACK OF ACCOUNTABILITY?

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Media Hit | Tax

These eight Massachusetts companies have used offshore tax havens

 Tax havens are legal, but proponents of tax reform say eight companies headquartered in Massachusetts are using them and costing the state millions of dollars in revenue.

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News Release | MASSPIRG Education Fund | Tax

Study: 72% of Fortune 500 Companies Used Tax Havens in 2014

 

Tax loopholes encouraged more than 72 percent of Fortune 500 companies – including 8 companies head quartered in Massachusetts – to maintain subsidiaries in offshore tax havens as of 2014, according to “Offshore Shell Games,” released today by MASSPIRG Education Fund, and Citizens for Tax Justice. Collectively, the companies reported booking nearly $2 trillion offshore for tax purposes, with just 30 companies accounting for 65 percent of the total, or $1.35 trillion.

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News Release | MASSPIRG Education Fund | Tax

Study: 72% of Fortune 500 Companies Used Tax Havens in 2014

 

Tax loopholes encouraged more than 72 percent of Fortune 500 companies – including 8 companies head quartered in Massachusetts – to maintain subsidiaries in offshore tax havens as of 2014, according to “Offshore Shell Games,” released today by MASSPIRG Education Fund, and Citizens for Tax Justice. Collectively, the companies reported booking nearly $2 trillion offshore for tax purposes, with just 30 companies accounting for 65 percent of the total, or $1.35 trillion.

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News Release | MASSPIRG | Tax

Deepwater Horizon Settlement Comes with $5.35 Billion Tax Windfall

Today’s announcement by the U.S. Department of Justice of a proposed $20.8 billion out-of-court settlement with BP to resolve charges related to the Gulf Oil spill allows the corporation to write off $15.3 billion of the total payment as an ordinary cost of doing business tax deduction. The majority of the settlement is comprised of tax deductible natural resource damages payments, restoration, and reimbursement to government, with just $5.5 billion explicitly labeled a non-tax-deductible Clean Water Act penalty. This proposed settlement would allow BP to claim $5.35 billion as a tax windfall, significantly decreasing the public value of the agreement, and nearly offsetting the cost of the non-deductible penalty.

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Media Hit | Tax

Your View: Time to end the corporate tax dodge

As summer arrives and hard-working Bay Staters stretch back on sandy shores, many of the corporations that do business here are also taking advantage of places like Bermuda and the Cayman Islands — to dodge their share of taxes. But last week a public hearing at the Statehouse discussed closing a key loophole that currently allows multinational companies to use offshore tax havens to avoid paying Massachusetts taxes.

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News Release | MASSPIRG Education Fund | Tax

Lawmakers Call for Closing Off Shore Tax Haven Loophole

As Tax Day approaches tomorrow, it’s a good time to be reminded of how ordinary taxpayers and specifically small businesses pick up the tab for offshore tax loopholes used by many large multinational corporations. MASSPIRG was joined today by Representatives Josh Cutler (D-Duxbury) and Lenny Mirra (R-West Newbury), Senator Mark Montigny (D-NewBedford) and Massachusetts Fair Share to release a new study by the MASSPIRG Education Fund revealing that the average Massachusetts small business owner would have to pay an extra $4,031 in state and federal taxes to make up for the money lost in 2014 due to offshore tax haven abuse by large multinational corporations and to call for the passage of a state bill to close one of the loopholes.

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News Release | MASSPIRG EDUCATION FUND | Budget, Tax

Massachusetts Receives "A" in Annual Report on Transparency of Government Spending

Massachusetts received an ‘A’ when it comes to government spending transparency.

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Report | MASSPIRG Education Fund | Tax

Offshore Shell Games 2015

U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to the tax code. Rather than paying their full share, many multinational corporations use accounting tricks to pretend for tax purposes that a substantial portion of their profits are generated in offshore tax havens, countries with minimal or no taxes where a company’s presence may be as little as a mailbox. Multinational corporations’ use of tax havens allows them to avoid an estimated $90 billion in federal income taxes each year.

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Report | MASSPIRG Education Fund | Tax

Picking Up the Tab 2015

Every year, corporations and wealthy individuals use complicated gimmicks to shift U.S. earnings to subsidiaries in offshore tax havens – countries with minimal or no taxes – in order to reduce their federal and state income tax liabilities by billions of dollars. While tax haven abusers benefit from America’s markets, public infrastructure, educated workforce, security and rule of law – all supported in one way or another by tax dollars – they continue to avoid paying for these benefits. 

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Report | U.S. PIRG Education Fund | Budget, Tax

Picking Up The Tab 2015: Small Businesses Pay the Price for Offshore Tax Havens

Every year, corporations and wealthy individuals use complicated gimmicks to shift U.S. earnings to subsidiaries in offshore tax havens – countries with minimal or no taxes – in order to reduce their federal and state income tax liabilities by billions of dollars. While tax haven abusers benefit from America’s markets, public infrastructure, educated workforce, security and rule of law – all supported in one way or another by tax dollars – they continue to avoid paying for these benefits.

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Report | MASSPIRG EDUCATION FUND | Budget, Tax

Following the Money 2015: How the 50 States Rate in Providing Online Access to Government Spending Data

Every year, state governments spend hundreds of billions of dollars through contracts for goods and services, subsidies to encourage economic development, and other expenditures. Accountability and public scrutiny are necessary to ensure that the public can trust that state funds are spent as well as possible.

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Report | MASSPIRG EDUCATION FUND | Tax

Offshore Shell Games

Tax loopholes encouraged more than 70 percent of Fortune 500 companies – including some companies headquartered in Massachusetts – to maintain subsidiaries in offshore tax havens. Collectively, the companies reported booking nearly $2 trillion offshore for tax purposes, with just 30 companies accounting for 62 percent of the total, or $1.2 trillion.

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