MOTHER JONES: American companies have around $2.1 trillion in untaxed profits stashed overseas, according to a new report by the Center for Effective Government and the Institute for Policy Studies. About half of that amount is held by 26 large companies like Apple, General Electric, and Microsoft. If these companies paid federal taxes on their offshored profits from 2014—and got refunds for taxes they’ve already paid to other countries—they would owe an estimated $364 billion. MORE
CENTER FOR EFFECTIVE GOVERNMENT: All businesses — large and small — rely on our nation’s infrastructure for their success. They need modern ports, stronger bridges, faster trains, and the fastest Internet. To modernize our infrastructure, the American Society of Civil Engineers estimated it would cost $3.6 trillion by 2020. They warned that if we fail to make these investments, American citizens and businesses will face costs of $1.8 trillion a year in travel delays, water leaks, and power failures. How has Congress responded? It’s slashed infrastructure spending to the lowest levels since the post-WWII era.
The cut-backs are in part the result of an abundance of tax credits and loopholes won by high-priced corporate lobbyists. One
particularly costly loophole allows large corporations to shift their U.S. profits to jurisdictions where corporate taxes are low or non-existent. Offshore corporate tax abuse costs the U.S. Treasury as much as $90 billion a year. To generate funds to pay for our nation’s crumbling infrastructure, Congress is considering giving corporations a “tax holiday.” Under current law, corporations can defer U.S. tax payments on overseas earnings until they bring the profits to the United States. The proposed “tax holidays” would allow corporations to bring these profits back now, but they would be taxed at a much lower tax rate than normal.
Each of these proposals rewards the very companies that have worked the hardest to game the tax system. These policies would also shortchange our future by generating just a small fraction of the $3.6 trillion we need to invest in our aging infrastructure by 2020 and wouldn’t address the longer-term problem of legalized tax dodging. When we tried this over ten years ago, it failed miserably. Corporations that participated shaved nearly $100 billion off their long-term IRS bills. And instead of boosting investment, they used the windfalls to buy back their stock and boost dividends while laying off more workers than they hired. Once the holiday was over, they began rebuilding their overseas profit stashes. Burning Our Bridges found that if just 26 American corporations paid the U.S. taxes they owe, we could use the revenue to repair our nation’s crumbling bridges, dams, water treatment systems, and much more. MORE
DOWNLOAD: Burning Our Bridges [PDF]
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