U.S. companies are saving $100 billion a year by shifting profits overseas, report says

By:  Renae Merle

NEW YORK — U.S. multinational companies are saving $100 billion a year by shifting their profits overseas to lower their tax bills, according to a study released Tuesday that found that corporate tax-dodging is a bigger problem than previously estimated.

Most U.S. companies pay far less than the country’s 35 percent tax rate and are using a multitude of maneuvers to keep their tax bills low, according to the study by Kimberly A. Clausing, an economics professor at Reed College. The study will be presented this week by the Washington Center for Equitable Growth, a D.C.-based think tank.

In addition to merging or buying smaller foreign firms and moving their headquarters overseas to lower their tax rates, known as an inversion, companies also assign patents to subsidiaries in countries in which the profits made from them will be taxed at a lower rate, the report says.

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