BERKELEY (July 29, 2011) — U.S. corporations avoided roughly $60 billion in federal income taxes last year by hiding profits overseas while the Fortune 100 companies alone reaped nearly $90 billion in taxpayer-funded contracts last year, The Greenlining Institute reports in a new analysis being released Thursday.
The report, authored by Greenlining Institute General Counsel Samuel S. Kang and Legal Associate Tuan Ngo, finds that top companies have added 44 new subsidiaries in countries identified as tax havens since the Government Accountability Office analyzed the issue in 2008. The taxes avoided by hiding profits offshore would be enough to pay the salaries of 1.2 million schoolteachers or fund the full budgets of the Departments of Energy, Labor, and the Environmental Protection Agency combined, with money to spare.
“America’s richest corporations avoid $60 billion a year in taxes by hiding $1 trillion in profits overseas while making billions in federal contracts,” said Kang. “It’s unpatriotic, it’s unfair, and we can’t afford it. It should be illegal, yet Congress is looking to cut the deficit by slashing Medicare, Social Security, food safety, education and health without collecting another dime from these wealthy companies.”
“Individual Americans pay on average 20.4 percent of their income in federal income taxes, while Exxon pays 14.2 percent, IBM pays 3.8 percent and DuPont and General Electric pay virtually nothing – even though the corporate tax rate is supposed to be 35 percent,” said Ngo.
Major tax avoiders include General Electric, which paid almost no federal income tax the last three years while reaping over $3 billion in U.S. contracts in 2010, and Google, whose “Double Irish Dutch Sandwich” illustrates a much-used template for corporate tax avoidance.
Preview the report at http://www.greenlining.org/resources/pdfs/CorporateAmericaUntaxed.pdf. A full list of the Fortune 100 companies, their numbers of tax haven subsidiaries and federal contract amounts at http://www.greenlining.org/resources/pdfs/100LargestCorporations.pdf.