US multinationals dodge $180 billion in taxes on foreign profits per year
By
Barry Grey
10 November 2018
US multinational corporations are plundering the populations of the United States and the world to the tune of trillions of dollars by driving down and evading taxes on profits booked overseas. This is the conclusion that emerges from a recent study by University of California at Berkeley economist Gabriel Zucman and British economist Thomas Wright.
Their paper, titled “The Exorbitant Tax Privilege,” points to the use of US military violence to drive down taxes on American oil multinationals by oil-producing states and a massive expansion of non-oil US firms booking their overseas profits in tax haven countries to generate huge tax savings and increased profits. The statistics the authors provide translate into $180 billion a year in tax savings on US multinationals’ overseas operations.
This is money diverted from government revenues in the US and around the world and funneled into the bank accounts and stock portfolios of the global financial oligarchy. In what amounts to an international extortion racket and swindling operation, the US government and both big business parties function as the enforcers of the American corporate elite.
Zucman and Wright note that oil-producing states in the Middle East and elsewhere slashed their tax rates on US oil companies from an average of 70 percent between 1966 and 1990 to an average of 45 percent following the first US-led Gulf War in 1990-1991.
They write: “The foreign tax rates of US oil multinationals fell significantly after the first Gulf War, during which the United States (and a number of other countries with significant investments in oil) intervened to protect Kuwait, a major oil producer.
“Although it is…