It’s time for corporations to stop hiding profits overseas, and start paying their fair share.
We talk a lot about corporations not paying their fair share. Here’s what we mean: Corporate taxes are at historic lows, both as a share of their pre-tax profits and as compared to the size of the U.S. economy. The biggest corporations are the best at dodging taxes, and they also receive huge tax breaks from state and federal governments. It’s not like these corporations can’t afford to pay more in taxes — corporate profits have never been higher than they are right now.
So, how are corporations getting away with not paying their fair share? By using every loophole possible, racking up tax breaks, buying discounted tax credits, and hiding profits overseas.
This is both a national and a global problem, but it hits Oregon harder than almost any other place: Oregon has the lowest corporate taxes in the country – by a lot.
Thanks to this aggressive offshoring, federal and state governments have missed out on billions of dollars of tax revenue.
It shouldn’t come as a surprise that some of the largest corporations employ armies of accountants and attorneys to set up complicated schemes to dodge taxes. One such scheme involves shifting profits made in America to foreign subsidiaries, where they’re shielded from U.S. taxes. Hiding profits from taxation costs states billions of dollars each year — which means schools and other critical services see cut after cut, at a time when working families need them the most.
Bloomberg News has reported that Fortune 500 companies now have more than $2 trillion in profits stashed overseas. General Electric and Microsoft both have more than $100 billion tucked in tax havens, and Pfizer, Apple, IBM, Merck, Johnson & Johnson, Cisco Systems, and Exxon Mobil each have more than $50 billion hidden away. It’s been reported that Wal-mart has more than $76 billion in profits stashed in countries in which it doesn’t even have any stores.
Thanks to this aggressive offshoring, federal and state governments have missed out on billions of dollars of tax revenue. And in Oregon, it’s a safe bet to say that if these corporations are using these tricks to avoid paying federal income taxes, they’re probably paying minimal taxes in Oregon too, since our income taxes are based on a share of a corporation’s federal taxable income.
This isn’t they way it should be. It’s time for corporations to stop hiding profits overseas, and start paying their fair share.