Tag Archives: offshore banking

Will Offshore Blackmailers Win Again?

Congress might be poised to kowtow to corporate offshore blackmailers again, according to Reuters News Service:

corporate gift from congressDemocrat Barbara Boxer of California and Republican Rand Paul of Kentucky called for allowing businesses to pay 6.5 percent corporate income tax on foreign profits brought into the country from overseas, instead of the current 35 percent rate, which they largely avoid.

Seriously, this offshore tax holiday bullshit again? Do we learn nothing from past mistakes? As the Center for Budget and Policy Priorities reports:

A tax holiday enacted in 2004 failed to produce the promised economic benefits. The evidence shows that firms mostly used the repatriated earnings not to invest in U.S. jobs or growth but for purposes that Congress sought to prohibit, such as repurchasing their own stock and paying bigger dividends to their shareholders. Moreover, many firms actually laid off large numbers of U.S. workers even as they reaped multi-billion-dollar benefits from the tax holiday and passed them on to shareholders.

Americans for Tax Fairness reports:

Multinational corporations are holding roughly $2 trillion in profits offshore – much of it in tax havens to avoid paying U.S. taxes. These corporations are costing U.S. taxpayers about $100 billion every year in lost revenue.

When corporations don’t pay their fair share of taxes, the rest of us must make up the difference. Here’s how much a handful of these corporations would likely owe in taxes if they brought those profits home:

  • Apple: $26 billion
  • Microsoft: $19.4 billiontax dodging
  • Amgen: $7.9 billion
  • Eli Lilly: $7.3 billion
  • Oracle: $6.3 billion
  • Dell: $6.2 billion

Now consider this: In a 2013 Senate subcommittee hearing, Apple CEO Tim Cook claimed: “We pay all the taxes we owe, every single dollar.” As Forbes reported at the time:

Apple, one of the world’s most valuable companies, was asked to testify about its tax programs as part of the subcommittee’s ongoing look into corporate tax loopholes.

The bi-partisan committee, headed by Carl Levin (D-Mich.) and John McCain (R-Ariz.), said its investigation found that Apple has shifted billions of dollars in profits away from the U.S. and into Ireland, where the maker of iPhones and iPads has negotiated a special corporate tax rate of 2 percent or less. The subcomittee said yesterday that Apple has avoided paying taxes on $44 billion in overseas earnings that should have been taxed in the U.S. over the past four years.

offshore_tax_rulesWhile Apple paid almost $6 billion in taxes last year, the company also shifted $36 billion in taxable earnings away from the U.S. in 2012 and avoided a payment of $9 billion, Levin said. That translates into avoiding $1 million an hour in taxes, or $25 million a day, he said. “Apple wants to focus on the billions in taxes it has paid. But the real issue is the billions in taxes it has not paid.”

In a rather humorous/ironic twist, Senator Rand Paul, one of those calling for this latest get-out-of-jail-free-card for tax dodgers:

accused his colleagues of trying to “vilify” Apple. Paul said the committee should “apologize” for forcing Apple to sit through a “show trial” and for having to cope with “a bizarre and Byzantine tax code.” “Money goes where it’s welcome,” Paul said, calling for comprehensive U.S. tax reform. “Frankly, I’m offended by the tone and tenor of this hearing…I’m offended by a $4 trillion government bullying, berating and badgering one of America’s greatest success stories.” (emphasis mine)

Poor little multimillionaire; I sympathize, don’t you?

There is a tax myth repeated ad nauseum by the Right and their “think tanks” like the Heritage Foundation that claims U.S. corporations pay the highest tax rates in the world. This myth has been debunked numerous times, and yet it remains a mantra on the Right. The corporate tax rate is supposedly 35% on U.S. profits; but, as Citizens for Tax Justice pointed out in their report The Sorry State of Corporate Taxes:

The report looks at the profits and U.S. federal income taxes of the 288 Fortune 500 companies that have been consistently profitable in each of the five years between 2008 and 2012, excluding companies that experienced even one unprofitable year during this period.

Some Key Findings:

• As a group, the 288 corporations examined paid an effective federal income tax rate of just 19.4 percent over the five-year period — far less than the statutory 35 percent tax rate.

• Twenty-six of the corporations, including Boeing, General Electric, Priceline.com and Verizon, paid no federal income tax at all over the five year period. A third of the corporations (93) paid an effective tax rate of less than ten percent over that period.

• Of those corporations in our sample with significant offshore profits, two thirds paid higher corporate tax rates to foreign governments where they operate than they paid in the U.S. on their U.S. profits.

This is a breakdown of U.S. tax revenue for 2013:

chart u.s. tax revenue 2013

In 2013, federal corporate income tax revenue was approximately $273.5 billion; at the same time corporate after-tax profits hit $1.68 trillion.

Now, I agree the tax system is a mess, so let’s fix it; lower the corporate tax rate, but eliminate all tax write-offs. Americans shouldn’t have to subsidize a company’s R&D, corporate jets, re-investment, etc.; if “they built that” then they can pay for their own costs of doing business. And stop letting billion dollar corporations call themselves small businesses, it’s an insult to true small business.

Let’s simplify the individual income tax while we’re at it, and stop allowing the wealthy to pay less taxes for doing nothing than those who actually work.

But most of all, let’s stop allowing big corporations and the rich to shirk their responsibilities, then blackmail America to get out of paying what they owe.

crossposted @ All Things Democrat

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Filed under Barbara Boxer, Corporate Greed, off shore banking, Politics, Rand Paul, Tax Cheats, Tax code

Corporate Criminals Update: January 21, 2015

Corporate Criminals

Corporate Criminals

Today’s corporate criminals and malfeasance courtesy of Corporate Crime Reporter:

 

dollar signThe Financial Industry Regulatory Authority (FINRA) has fined Fidelity Investments $350,000 for overcharging more than 20,000 customers a total of $2.4 million.

FINRA charged that “Fidelity did not have reasonable supervisory systems or procedures to ensure that customers were charged accurate fees for accounts managed by third-party investment advisors, which resulted in erroneous and duplicate fees charged in certain customer accounts utilizing asset-based pricing, duplicate fees in certain customer accounts managed by third-party wrap providers, and erroneous markups on certain fixed income investments.”

According to the settlement with FINRA, in one program, Fidelity “did not accurately reflect the fees charged to customers.”

 

dollar signGeorge Landegger, the chairman of an international pulp mill company, Parsons & Whittemore, pled guilty to willfully failing to file reports of foreign bank and financial accounts (FBARs) with the IRS regarding secret Swiss bank accounts that he maintained and controlled at a Swiss private bank headquartered in Zurich, Switzerland.

Landegger maintained his undeclared accounts at the Swiss Bank from at least the early 2000s up until 2010.

During that time, Landegger’s undeclared assets reached a high value of over $8.4 million.

 

dollar signMore than 1,000 cities, counties, school districts and other government entities in California – including Los Angeles and Santa Clara County – will share in a $68.5 million settlement paid by Office Depot for allegedly overcharging them for office supplies.

The California entities participated in the US Communities purchasing program, which was set up to allow state and local governments across the country to leverage their combined purchasing power by appointing a single public entity to negotiate a contract with a vendor on behalf of all US Communities members.

Participants in the contract are guaranteed to receive Office Depot’s best available prices for government purchasers, according to Sherwin’s complaint.
But Office Depot allegedly gave Los Angeles, Santa Clara and the other California entities that are part of the settlement a lower discount rate than other government entities were given.

 

martha stewart

 

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Filed under Big Banks, Corporate Crime, off shore banking