As Burger King heads north for Canada’s lower corporate tax rate, we speak to Rolling Stone contributing editor Tim Dickinson about his new article, “The Biggest Tax Scam Ever.” Dickinson reports on how top U.S. companies are avoiding hundreds of billions of dollars by parking their profits abroad – and still receiving more congressionally approved incentives.
Dickinson writes: “Top offenders include giants from high-tech (Microsoft, $76 billion); Big Pharma (Pfizer, $69 billion); Big Oil (ExxonMobil, $47 billion); investment banks (Goldman Sachs, $22 billion); Big Tobacco (Philip Morris, $20 billion); discount retailers (Wal-Mart, $19 billion); fast-food chains (McDonald’s, $16 billion) — even heavy machinery (Caterpillar, $17 billion). General Electric has $110 billion stashed offshore, and enjoys an effective tax rate of 4 percent — 31 points lower than its statutory obligation to the IRS.”
“The inversion trend is just the tip of a very destructive iceberg that’s seen the hollowing out of our corporate tax base. And so, the inversions, you know, is just basically a legal scam that lets a company technically offshore itself for a lower tax rate. And it goes sort of hat in hand with companies shipping massive quantities of corporate profits overseas through sort of elaborate accounting schemes.
And while it’s overseas, it sits there tax-free, accumulates tax-free kind of like a 401(k) does. And so, right now there’s about $2 trillion in corporate profits that are stockpiled overseas, on which the U.S. government is technically owed something like half a trillion dollars. So, at the same time that we’re cutting food stamps, that we’re cutting home heating aid to the elderly, you know, there’s literally a jackpot of half a trillion dollars that politicians on both sides of the aisle just won’t go after, because there’s just an imbalance of power there. The corporate power has grown much greater than state power in this case.”–Tim Dickinson