Close Corporate Tax Loopholes

Across the country, some of the nation’s most prosperous people and companies — including GE, Google and Goldman Sachs — have avoided paying the taxes they owe, costing taxpayers $150 billion just last year.

TAX HAVENS COST US $150 BILLION A YEAR

No company should be able to game the tax system to avoid paying what it legitimately owes. And, yet, with atleast 83 of the nation's top 100 publicly traded companies establishing shell companies in offshore havens to avoid taxes, this is becoming more the rule than the exception. GE, Google, Goldman Sachs and dozens of others have created hundreds of phantom entities with nothing more than a clever tax attorney and P.O. box. 

Most recent academic studies estimate that about $150 billion in tax revenue is lost every year to offshore tax havens. The result? Cuts to public services, additional taxes today or additional debt to be paid by the next generation. 

It’s not illegal, but it’s not right.

Meanwhile . . . the average taxpayer paid $1,026 more to cover the billions that GE and others skipped out on last year, companies that don’t use these schemes keep struggling to compete with those that do, and state legislatures and Congress are considering deep cuts for essential public programs — from education, to health care, to clean air and drinking water.

We're being asked to tighten our belts and make sacrifices while giving the tax haven crew a free ride. U.S. PIRG is pushing for commonsense changes that simply say that if corporations are based here and generate profits here, then they should, like all of us who earn income here, pay the taxes they owe.

Issue updates

News Release | U.S. PIRG | Tax

Extendicare, in $38 Million Elderly Mistreatment Settlement, Gets Go Ahead from Justice Department to Claim Payment as "Ordinary Business Expense"

Today’s Justice Department settlement with Extendicare allows the company to deduct the $38 million payment from its taxes as an “ordinary business expense,” leaving the door open for Extendicare to take a tax windfall of $13.3 million.

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News Release | U.S. PIRG | Tax

U.S. PIRG statement in response to the resignation of Attorney General Eric Holder

Attorney General Eric Holder's Department of Justice negotiated many large settlements to resolve charges of corporate wrongdoing, but he missed an opportunity to leave behind a legacy of increased transparency and public protections against companies writing off settlements as tax deductions.

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Media Hit | Tax

Obama didn't put up 'much of a fight' to keep Holder

"Holder faced criticism from consumer advocates, too. He was accused of failing to prosecute bankers responsible for the mortgage meltdown in 2008 — and when he reached civil settlements with major Wall Street institutions, he often allowed them to write off the judgments as business expenses, said Michelle Surka of the U.S. Public Interest Research Group."

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Blog Post | Budget, Tax

Recent Inversion Wave Brings on Slew of Outrage - What's Next? | Jaimie Woo

 

Ten years ago, Republicans and Democrats agreed that corporate tax dodging was a problem, and came together to fix it. But large U.S. corporations got trickier — they sought out new ways to get around paying their taxes on U.S. profits, hiring thousands of tax accountants to take advantage of loopholes in our tax code. The recent fix? Corporate inversions.

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News Release | U.S. PIRG | Tax

Taxpayers Will Bear Nearly $200 Million of Friday’s HSBC Settlement

Friday’s $550 million settlement between the Federal Housing Finance Agency (FHFA) and HSBC North American Holdings Inc. can be treated as a tax write-off by the bank, shifting $192.5 million onto taxpayers. Because the FHFA did not specify that the settlement payment cannot be treated as a regular business expense, HSBC will be able to deduct the entirety of the $550 million payment.

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Media Hit | Tax

Obama didn't put up 'much of a fight' to keep Holder

"Holder faced criticism from consumer advocates, too. He was accused of failing to prosecute bankers responsible for the mortgage meltdown in 2008 — and when he reached civil settlements with major Wall Street institutions, he often allowed them to write off the judgments as business expenses, said Michelle Surka of the U.S. Public Interest Research Group."

> Keep Reading
News Release | U.S. PIRG | Tax

Taxpayers Will Bear Nearly $200 Million of Friday’s HSBC Settlement

Friday’s $550 million settlement between the Federal Housing Finance Agency (FHFA) and HSBC North American Holdings Inc. can be treated as a tax write-off by the bank, shifting $192.5 million onto taxpayers. Because the FHFA did not specify that the settlement payment cannot be treated as a regular business expense, HSBC will be able to deduct the entirety of the $550 million payment.

> Keep Reading
News Release | U.S. PIRG | Tax

BP Could Take $6.3 Billion Tax Deduction For Gross Negligence In Deepwater Horizon Spill

BP could claim a $6.3 billion tax windfall from settling charges of its gross negligence in the Deepwater Horizon disaster unless the EPA prevents it

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News Release | U.S. PIRG | Tax

Last week’s other big bank settlement also shifts burden to taxpayers

Goldman Sachs will be able to take a $420 million tax write off on the bank's FHFA settlement for its mortgage misdeeds. A similar settlement paid in 2010 to the SEC specifically prohibited such tax deductions.

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News Release | U.S. PIRG | Tax

Bank of America settlement loophole creates at least $4 billion burden for taxpayers

 The Justice Department allows Bank of America to write off most of its legal settlement for mortgage abuses as a tax deduction, shifting at least $4 billion back onto taxpayers.

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Report | U.S. PIRG Education Fund | Budget, Tax

Transparency in City Spending

The ability to see how government uses the public purse is fundamental to democracy. Transparency in government spending checks corruption, bolsters public confidence, improves responsiveness, and promotes greater effectiveness and fiscal responsibility.

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Report | U.S. PIRG Education Fund | Budget, Tax

Subsidizing Bad Behavior

BP’s recent $4.5 billion legal settlement with the Justice Department for its misdeeds in the Gulf oil spill was historic for being the largest ever criminal settlement. But it was historic for another reason as well—none of it is allowed to be tax deductible. Unfortunately, too many settlements for wrongdoing end up as tax deductions.

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Report | U.S. PIRG Education Fund | Budget, Tax

What America Could Do With $150 Billion Lost to Offshore Tax Havens

Many corporations and wealthy individuals use offshore tax havens—countries with minimal or no taxes—to avoid paying $150 billion in U.S. taxes each year. By shielding their income from U.S. taxes, corporations and wealthy individuals shift the tax burden to ordinary Americans, who must pick up the tab in the form of cuts to public services, more debt, or higher taxes. The $150 billion lost annually to offshore tax havens is a lot of money, especially at a time of difficult budget choices. To put this sum in perspective, we present 16 potential ways that income could be used.

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Report | U.S. PIRG | Tax

Rogues Gallery of Major Corporate Legal Settlements

The following list of recent major corporate settlements displays a harrowing array of harms to the public. After government agencies sought redress for corporate wrongdoing, they negotiated with the companies for payments that were presumably less than the agency would have ordered in damages or fines if it had chosen to go through with a protracted lawsuit.

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Report | U.S. PIRG | Tax

Picking Up the Tab

Some U.S.-based multinational firms or individuals avoid paying U.S. taxes by transferring their earnings to tax haven countries with minimal or no taxes. These tax haven users benefit from their access to America’s markets, workforce, infrastructure and security; but they pay little or nothing for it—violating the basic fairness of the tax system and forcing other taxpayers to pick up the tab.

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Blog Post | Budget

Problems With Privatized Law Enforcement's New Frontier | Phineas Baxandall

One in five Americans lives in a jurisdiction that outsources traffic ticketing this way, according to a newly released report from the U.S. Public Interest Research Group, titled "Caution: Red Light Cameras Ahead; The Risks of Privatizing Traffic Law Enforcement and How to Protect the Public." And a report released by the Justice Department suggests this trend may accelerate under the twin pressures of budget pressure and intense lobbying.

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Blog Post | Budget

How Much Did You Pay for Tax Dodging Corporations? | Phineas Baxandall

Yesterday, millions of Americans rushed to the post office to file their federal income tax returns. For all of us, the checks we wrote were an average of $434 higher because of the burden we are forced to shoulder for major corporations and wealthy individuals who use offshore tax havens to avoid paying their share.

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PRIORITY ACTION

Some of the nation’s most prosperous people and companies — including GE, Google and Goldman Sachs — avoid paying the taxes they owe, costing taxpayers $150 billion just last year.

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