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January 17, 2009
GAO: Withering report on offshore tax havens
The GAO has released a withering report describing how America's most powerful corporations, including many federal contractors and numerous banks on the TARP taxpayer dole, hide income in tax haven countries. While this appears to most disinterested observers to be a stellar way to avoid paying their fair share of taxes, the report International Taxation: Large U.S. Corporations and Federal Contractors with Subsidiaries in Jurisdictions Listed as Tax Havens or Financial Privacy Jurisdictions lists a variety of reasons for the practice and does not draw conclusions. Nevertheless, one of its Congressional requesters, Senator Byron Dorgan (D-ND), stated in the Washington Post: "This is kind of like economic patriotism," Dorgan said. "Americans were told you have to pony up some money to help these companies. And it's rather infuriating for them to find out now that those companies, when they were profitable, didn't want to pay taxes and found clever ways to hide their money overseas." The Post goes on to point out that President Obama may support efforts to end the deplorable practice:
It is all legal, but it could come to an end, given the dire condition of the U.S. economy and President-elect Barack Obama's campaign pledge to close this popular business tax loophole. The Treasury estimates that it loses $100 billion a year in tax revenue as a result of companies shipping their income off shore, and congressional leaders are vowing to introduce legislation forcing big companies to pay full freight. In a joint release with his co-requester Senator Carl Levin (D-MI), Dorgan also said: “This report shows that some of our country’s largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government,” said Senator Dorgan. “I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that.” New York Times has more. Our previous blog on tax cheats.
Posted by Ed Mierzwinski at January 17, 2009 03:57 PM
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