The Steep Cost of Tax Dodging

Supports to a bridge crumble in Iowa City, Iowa, in a photo taken on September 15, 2014. The long-deteriorating infrastructure of the United States is repaired and maintained with tax funds, much of which are currently being withheld in offshore accounts by large corporations long-overdue in paying their share. (Photo: Phil Roeder)Supports to a bridge crumble in Iowa City, Iowa, in a photo taken on September 15, 2014. The long-deteriorating infrastructure of the United States is repaired and maintained with tax funds, much of which are currently being withheld in offshore accounts by large corporations long-overdue in paying their share. (Photo: Phil Roeder)

The old saying goes that there are two things certain in life: death and taxes. But do taxes actually apply to the rich and powerful?

US corporations enjoy US infrastructure, talent and other resources, but they’re not giving back financially. Over the last 50 years, the corporate share of federal revenues has dropped from a high of almost 40 percent in 1943 to less than 9 percent today. And while corporations pay less, ordinary Americans are called upon to make up the difference. Individual income taxes will account for nearly 49 percent of all federal revenues in 2016. If you add payroll taxes, individual taxes will make up more than 80 percent of US government revenues this year.

The US tax code is riddled with tax breaks and loopholes that cost the US Treasury more than $1 trillion every year — as much as the entire federal discretionary budget. And those are just the breaks that are on the books — this figure doesn’t even include tax-dodging practices, such as keeping profits offshore.

The recently released Panama Papers, a giant leak of 11.5 million financial and legal documents from Panamanian law firm Mossack Fonseca, have brought the world’s pervasive tax avoidance problems into the spotlight in recent weeks. The leak reveals the ways in which some of the world’s most powerful people — political leaders, celebrities and members of organized crime networks — have used offshore bank accounts and shell companies in order to dodge their tax responsibilities.

Fortunate 500 companies are avoiding nearly $700 billion in US federal income taxes by keeping $2.4 trillion in profits offshore.

While this major leak has placed global tax…

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