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The Romney Effect: States Lose $39.8 Billion Due to Offshore Tax Avoidance
The need to close corporate loopholes became even more apparent after a new study revealed today that state budgets were hit collectively with $39.8 billion in lost revenue from offshore tax dodging in 2011, and corporations account for more than $26 billion of that lost tax revenue.
A study released today by the U.S. Public Interest Research Group, a Washington-based consumer group that also lobbied for the creation of the Consumer Financial Protection Bureau, determined that it’s not just the federal government that’s hit by tax dodgers like Mitt Romney. The states get hit, too.
In 2011, states lost approximately $39.8 billion in tax revenues from corporations and wealthy individuals who sheltered money in foreign tax havens. Multinational corporations account for more than $26 billion of the lost tax revenue, and wealthy individuals account for the rest…
Some of the largest companies in the United States use tax havens, including many that have taken advantage of government bailouts or rely on government contracts. As of 2008, 83 of the 100 largest publically traded corporations in the United States maintained revenues in offshore tax havens, according to the Government Accountability Office.
At the end of 2011, 290 of the top Fortune 500 companies using tax havens collectively held $1.6 trillion in profits outside the United States—up from $1.1 trillion in 2009—according to Citizens for Tax Justice.
Dan Smith, Tax and Budget Advocate for U.S. PIRG Education Fund and report co-author, explained that tax dodging is not a victimless offense, “Tax dodging is not a victimless offense. When corporations skirt taxes, the public is stuck with the tab. And since offshore tax dodgers avoid both state and federal taxes, they hurt everyday taxpayers twice. States should be using that money to benefit the public.”
In fact, here’s what that 39.8 billion dollars could buy us:
$39.8 billion would cover education costs for more than 3.7 million children for one year.
This sum is also roughly equivalent to total state and local expenditures on firefighters ($39.7 billion) or on parks and recreation ($40.6 billion) in FY 2008.
Wondering about those upcoming spending cuts that are so concerning to economists? According to this study, offshore tax loopholes cost federal taxpayers $150 billion each year, “which would be more than enough to cover the scheduled spending cuts that are set to take effect in just a few weeks.”
Senator Bernie Sanders recently revealed the 18 CEOs who took trillions in bailouts, evaded taxes and outsourced jobs. Given the fact that this country has spent the last four years pandering to Republican concerns over the deficit that they created while Rome burned for our citizens, it seems only right that we spend the next four years actually addressing the inequities in the tax code that not only add to the deficit, but also allow those with the most to do the least for their country.
Concerned about the deficit? Why not address that problem for real instead of using it as an excuse to make ideological cuts to the most vulnerable and to our country’s traditions like public schooling.
As Republican governors around the country threaten to cut needed services like Hospice in order to address their fiscal crises, they are ignoring that there’s a much fairer way to address the problem. How about if everyone who avoids paying taxes by shifting their money offshore starts doing their part?
We’ve asked the poor and middle class to suffer and give. It’s time to ask the tax dodgers to do their part for their country.