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

Biggest Tax Dodgers

 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

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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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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Blog Post | Tax

MASSPIRG urges legislative committee to end the tax dodge | Deirdre Cummings

Testyfying before the Joint Committee on Revenue, today, MASSPIRG urged the committee to support An Act closing a corporate tax haven loophole, HB 2477 and SB 1524. The bill will reduce corporate tax avoidance through the use of offshore tax havens saving Massachusetts taxpayers  $79 million a year while making the tax code fairer for ordinary taxpayers and small businesses.

 

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News Release | MASSPIRG | Budget, Tax

MASSPIRG PRAISES BIPARTISAN BILL REINTRODUCTION PROHIBITING TAX WRITE-OFFS FOR WRONGDOING

Today in Washington DC, U.S. Senate leaders Chuck Grassley (R-IA) and Jack Reed (D-RI) reintroduced The Government Settlement Transparency and Reform Act, which would restrict the ability for corporations to reap massive tax write-offs from payments made to settle allegations of misconduct or criminal wrongdoing.  

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News Release | MASSPIRG EDUCATION FUND | Tax

Study: 70% of Fortune 500 Companies Used Tax Havens in 2013

Tax loopholes encouraged more than 70 percent of Fortune 500 companies – including some companies headquartered in Massachusetts – to maintain subsidiaries in offshore tax havens as of 2013, according to “Offshore Shell Games,” released today by MASSPIRG Education Fund and Citizens for Tax Justice.

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News Release | MASSPIRG EDUCATION FUND | Budget, Tax

Poll: Public Wants Federal Agencies to Disclose and Restrict Corporate Tax Write Offs for Out-of-Court Settlements

In recent years, public outrage has built as federal agencies have allowed out-of-court settlements for corporate wrongdoing — like BP’s gulf oil spill and JPMorgan’s toxic mortgages — to be written off for multibillion-dollar tax breaks. See new poll confirming public outrage and support for solutions.

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News Release | MASSPIRG | Budget, Tax

Offshore Tax Havens Cost Average MA Taxpayer $1,886 a Year, MA Small Business $6,269

As hardworking Americans file their taxes today, it’s a good time to be reminded of how ordinary taxpayers pick up the tab for the loopholes in our tax laws. 

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News Release | MASSPIRG EDUCATION FUND | Budget, Tax

MA Could Save $79 Million Curbing Offshore Tax Dodging

Massachusetts taxpayers could save $79 million from a simple reform to crack down on offshore tax dodging. MASSPIRG and small businesses owners call for reform.

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Report | MASSPIRG | Budget, Tax

Picking up the Tab 2014: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens

As hardworking Americans file their taxes today, check out this report to see how ordinary taxpayers pick up the tab for the loopholes in our tax laws.

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Report | MASSPIRG | Budget, Tax

Closing the Billion Dollar Loophole

Massachusetts taxpayers could save $79 million from a simple reform to crack down on offshore tax dodging, according to a new report.

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Report | MASSPIRG | Budget, Tax

Picking Up the Tab 2013

Off Shore Tax Havens Cost Average Massachusetts Taxpayers $1,542 a Year.

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Report | MASSPIRG Education Fund | Budget, Tax

Getting Our Money's Worth?

The people of Massachusetts deserve to know how their tax dollars are spent, including on tax subsidies for businesses. Full transparency allows citizens to hold lawmakers, government contractors, and recipients of public subsidies accountable. It also promotes fiscal responsibility, checks corruption, and bolsters public confidence in government.

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Report | MASSPIRG Education Fund | Budget, Tax

The Hidden Costs of Offshore Tax Havens

When U.S. corporations and wealthy individuals use offshore tax havens to avoid paying taxes to the federal government, it is an abuse of our tax system. Tax haven abusers benefit from our markets, infrastructure, educated workforce, and security, but they pay next to nothing for these benefits. Ultimately, taxpayers must pick up the tab, either in the form of higher taxes, cuts to public spending priorities, or increased national debt. Massachusetts alone lost $1.66 billion in 2012.

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