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According to Tax Shell Game, a new report released today by the Arizona PIRG Education Fund, major U.S. corporations avoid as much as $100 billion a year in federal taxes by hiding profits in foreign countries. This loophole results in over $1.3 billion in additional tax burdens for Arizona taxpayers.
“As hard-working people in Arizona head to Post Offices to file their tax returns, many of the largest corporations in our country have gone to extreme lengths to avoid paying their fair share,” stated Diane E. Brown, Executive Director of the Arizona PIRG Education Fund. “Corporations who hide profits made in the United States in offshore shell companies and sham headquarters in order to avoid paying billions in federal taxes results in a massive loss of tax revenue – for which ultimately the rest of us pay.”
According to the Arizona PIRG Education Fund, over 80 percent of the largest companies in the U.S. hide profits in the Cayman Islands and other tax havens. The companies include American Express, A.I.G, Boeing, Cisco, Dow, Hewlett-Packard, J.P. Morgan Chase and Pfizer. Over 18,000 U.S. companies currently maintain a post office box in one five story building in the Cayman Islands to take advantage of the loophole.
President Obama’s budget proposal, which is working its way towards final passage in the Congress, recommends closing this loophole and giving additional tax relief to middle-class taxpayers.
“The President’s budget turns the page on the failed policies of the past by ending wasteful corporate handouts and investing instead in important priorities that have been shortchanged,” Brown said. “Today should be the last Tax Day when high-priced accountants and secret post office boxes are valued over hard work and accountability.”
Members of Arizona’s Congressional delegation were urged to follow the lead of the President and support his plan to restore fairness to the tax code, by closing these off-shore tax havens and removing the unfair burden on everyday tax-payers.
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