The 50 biggest US companies have hidden more than a trillion dollars offshore – a figure more than the entire GDP of countries such as Australia, according to a report published by Oxfam last week.
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The report, Broken at the Top, claims that the companies, which include global brands like Pfizer, Goldman Sachs, Dow Chemical, Chevron, Walmart, IBM and Walt Disney, have “hidden” more than $US1.3 trillion offshore and used more than 1,600 subsidiaries in tax havens to avoid paying billions in tax.
It says the companies made almost $US4 trillion in global profits between 2008 and 2014 and found that use of offshore tax havens over the period meant they were able to lower their effective overall tax rate to an average of 26.5 per cent compared to the US statutory tax rate of 35 per cent.
According to Oxfam’s calculations, the companies received approximately $US27 in government support for every $US1 they paid in federal taxes over the period.
In addition, the report – which was released last Thursday ahead of ‘Tax Day’ – deadline day for people to file their income tax details in the US, found that the 50 companies spent about $US2.6 billion lobbying the US Government and estimates that for every $US1 spent on lobbying, the 50 companies collectively received $US130 in tax breaks and more than $US4,000 in subsidies from the US Government.
Robbie Silverman, senior tax advisor at Oxfam, said in a statement that “(y)et again we have evidence of a massive systematic abuse of the global tax system”. “We can’t go on with a situation where the rich and powerful are not paying their fair share of tax, leaving the rest of us to fit the bill,” he said. “Governments across the global must come together now to end the era of tax havens.”
Oxfam is calling on US President Barack Obama and other world leaders to reform the “broken global tax system”.
Oxfam, which believes corporate tax dodging costs the US an estimated $US100 billion a year, believes that 90 per cent of the top 200 companies globally use tax havens.
The issue recently received widespread coverage following the release of more than 11 million documents from Panama-based law firm Mossack Fonseca which revealed widespread use of tax havens by wealthy global elites.
To see the full report, follow this link.
