Just when the U.S. Treasury needs the money most, American companies are finding new ways to shift profits to overseas tax havens and legally avoid paying the U.S. tax rate of 35 percent – among the highest in the world. Lesley Stahl reports below.
If American based companies are going to hide assets or use Zug, Ireland or the Caribbean as corporate headquarters they should pay import taxes on goods and services. Even those manufactured here. They certainly shouldn’t be getting government subsides of any kind. A small or moderate business owner who tried this kind of maneuver would be jailed and lose his business. Why aren’t we doing the same thing to the CEO trying this tactic? This is really nothing more than what amounts to corporate theft. They are getting all of the benefits of what the US has to offer with no financial responsibilities.
On the local level many manufacturing plants get state grants, tax breaks as well as other guarantees to set up shop. It is the local taxpayer picking up the load. Yes these companies do bring in jobs but local people pay to educate the employee’s children at local schools as well as the additional infrastructure to absorb the needs of these plants as well as the employees that settle in the area. There is no fairness to those working families trying to do the right thing for the right reason. This corporate greed is why some will never afford to retire.
Chris, we need to distinguish between small, local businesses and large multinationals. Small business owners should be wary whenever a politician, or the US Chamber talks about “business-friendly” policies. We need to ask which business they are talking about.
This isn’t just small local businesses or one man operations. It is about companies that generate a fair amount of revenue but are home grown and proud of it. They aren’t large enough to have the clout of a corporate entity. They aren’t given tax breaks on a local level even though they generate hundreds of jobs and contribute to local communities.
I have sat in on county council meetings that funded industrial parks, built roads and granted tax breaks and waived school millage rates for corporations. The local players generating more stay at home revenue can’t get frontage roads fixed or promised water lines to their place of business. One is a concrete block company with a reach of several hundred miles. Another is a wholesale nursery supplying the Southeast. There are many others but they don’t qualify as corporate giants. They contribute far more on a local and state level than the nationally known companies.
I enjoyed watching your 60 Minutes report about overseas tax havens, which American corporations set up to dodge taxes. I suspect that our large corporate will always find a way to dodge or minimize taxes, no matter if laws are re-written to ‘criminalize’ overseas tax havens.
Thanks again for your excellent reporting.
It was just announced that neither GE nor Bank of America have to pay any federal taxes this year. Both received tax benefits in the billions! That is just incredible considering the current state of our economy. Yet the politicians continue to blame the “greedy” teachers and state workers!
It comes down to profitability. If you had for example a custom area rug business and were faced with a 35% tax base to run your business rendering you a 22% profit you might be very interested in moving your business to, say, Vietnam, where you could easily realize a profit margin of 65% annually. Money is money and we all need it to live and thrive.
The United States should be luring her businesses back home not pushing them out.