WASHINGTON, Feb. 18 – Sen. Bernie Sanders (I-Vt.), the ranking member of the Senate Budget Committee, today called on America’s leading corporations to stop sheltering profits in the Cayman Islands and other offshore tax havens. He also urged them to stop lobbying Congress for additional tax breaks as the Business Roundtable, an organization representing some of the largest corporations in the country, is expected to do tomorrow.
Sanders issued a new report that provides a fresh glimpse into the far-reaching corporate tax avoidance strategies of large and profitable companies represented by the Business Roundtable, including what he calls the "legalized tax fraud” of sheltering profits in offshore tax havens.
The report shows for the first time how more than 50 percent of the companies represented by the Business Roundtable are collectively holding more than $1 trillion in profits in offshore tax haven countries where it is not subject to U.S. taxes.
The report also shows that several of the companies have been profitable for years but pay nowhere near the 35 percent income tax rate that nominally applies to corporate profits. In fact, according to a report last year by the Government Accountability Office, the effective tax rate for large, profitable corporations was just 12.6 percent in 2010, a figure that Sanders is asking the GAO to update today. The report also points out that a number of huge corporations – including General Electric, Boeing, Duke Energy and Verizon – not only have paid nothing in federal income tax in recent years, they received refunds from the IRS.
“Instead of sheltering profits in the Cayman Islands and other offshore tax havens, the largest corporations in this country must pay their fair share of taxes so that our country has the revenue we need to rebuild America and reduce the deficit. At a time when corporations are making record-breaking profits, while the middle class is disappearing and senior poverty is on the rise, the last thing we should be doing is giving huge tax breaks to profitable corporations that don’t need it,” Sanders said.
In the new report, Sanders documents how the Business Roundtable continues to lobby for lower corporate taxes for companies that have shifted U.S. profits offshore, while advocating for deep cuts to Social Security and Medicare for some of the most vulnerable Americans.
Specifically, the report finds that of the 201 companies represented by the Business Roundtable:
- One-hundred eleven of them have subsidiaries in offshore tax havens.
- These 111 corporations are officially holding more than $1 trillion in profits offshore where they are not subject to U.S. taxes.
- Eighty-one of these profitable corporations collectively pocketed $188 billion in income tax breaks during a 5-year period.
- Ten of these corporations not only paid nothing in federal income taxes but collected tax rebate checks from the government.
Sanders concluded, “It is an outrage that the CEOs of the largest and most profitable corporations in this country are calling for even more tax breaks to help themselves while, at the same time, are advocating for huge cuts to Social Security and Medicare and other programs that help working families. While the middle-class of this country is disappearing and millions of working families are struggling economically, the clear goal of the Business Roundtable is to make the rich even richer at the expense of everyone else. That is not only morally repugnant, it is bad economic policy."
Sanders said that he will soon be re-introducing legislation to crack down on corporate tax avoidance by making sure that profits shifted to offshore tax haven subsidiaries are taxed at the top U.S. corporate tax rate.
To read the report, click here.