Corporations collectively owe, both to the US Treasury, and to poorer governments around the world, about $100 billion in unpaid debts they’ve socked away through tax offshoring.
According to Oxfam’s latest brief on tax offshoring, to close the $100 billion gap in the public coffers, “the average American taxpayer would have to shell out an extra $760” in taxes. Thanks to a sophisticated tax arbitrage tactic, “In 2012, US multinationals alone shifted $700 billion from countries where their profits were truly earned to locations with very low or zero tax rates.”
If that $100 billion showed up on the government’s books, we could fund essential healthcare for more than 2 billion people worldwide, “quadruple spending on education in the world’s 47 poorest countries,” or basically finance the annual budgets for federal social security, labor and unemployment, and education program spending in the United States.
The amount robbed from the Treasury can also be assessed not in terms of what isn’t paid for but what the companies managed to cough up versus what they got to stow safely in offshore coffers.
According to Oxfam, during 2008 through 2014, while the economy reeled and then hobbled forward, “the 50 largest US companies collectively received $27 in federal loans, loan guarantees and bailouts for every $1 they paid in federal taxes.” It’s not that they were exactly ungenerous to Washington; they were just savvy in terms of where they deposited their assets. The same companies collectively sank $2.6 billion into lobbying federal officials, and got a return on investment of “nearly $11.2 trillion in federal loans, loan guarantees and bailouts.” Overall, 45 of the 50 companies scored major tax discounts, whittling down the statutory 35 percent corporate rate to just 27 percent, Oxfam reports. Since all this happened while state and local budgets were gutted so communities could supposedly “live within their means,” it’s no wonder people are outraged that companies have funneled away billions that might otherwise help repair the damage of the financial crisis.