U.S. PIRG, the federation of state Public Interest Research Groups, used Tax Day this week to release a new study showing the average American taxpayer will have to pay an extra $426, while small businesses will pay an extra $2,116, to make up for tax losses caused by corporations hiding money in offshore tax havens:
“When corporations shirk their tax burden by shifting profits legitimately made in the U.S. to offshore tax havens like the Caymans, the rest of us must pick up the tab through either cuts to public spending priorities, higher taxes, or more debt,” said Dan Smith, Tax and Budget Associate for U.S. PIRG and one of the report’s co-authors. “Responsible small businesses are further hurt by corporate tax dodging because they are put at a competitive disadvantage since they can’t hire armies of well paid lawyers and accountants to use offshore tax loopholes.”
Nearly $100 billion in tax revenue is lost each year by wealthy individuals and corporations moving money to tax havens. Of that number, nearly $60 billion is held by corporations — and it’s not just a few bad apples. A Government Affairs Office study recently found that 83 of the top 100 traded corporations are guilty of abusing this “tax loophole.”
Taxes are not just numbers in spreadsheets,” said Joseph Rotella, owner of Spencer Organ Company in Waltham, Massachusetts, and who spoke at the event. “Taxes provide the revenues that pay for roads, bridges, public safety, public schools, public transportation and other infrastructure and services my business and my customers count on. We need to stop the tax haven abuse that lets big corporations avoid paying their fair share and gives them an unfair advantage in the marketplace.”
One of the few politicians championing reforms to help stop the slow bleed of lost tax revenue is Congressman Chris Van Hollen (D-MD), who has cosponsored two bills, the Stop Tax Haven Abuse Act (H.R. 2669) and Cut Unjustified Tax Loopholes Act (S.2075) that seek to right this titanic wrong:
“The simple fact of the matter is this: tax breaks for Big Oil, corporate jets, and companies that send jobs overseas have the practical effect of raising taxes on everyone else. That’s not right. That’s not smart. That’s not fair. And it’s high time we do something about it,” said Congressman Van Hollen.
If anything is indicative of the toxic, corporate (non)taxation environment in the United States it is the discovery that 30 companies have actually paid more in campaign contributions and lobbying expenses than income taxes.
Without reforms, the problem of corporate tax evasion will continue its chilling effect of unfairly burdening the American people who have the least to give.