Forget about Donald Trump. While the GOP presidential nominee may say he “brilliantly” took advantage of tax laws to avoid paying personal taxes, America’s largest companies do the same for their corporate taxes on an even larger scale.
Last year, nearly three-quarters of Fortune 500 companies had subsidiaries in offshore tax havens, allowing them to avoid up to $717.8 billion in U.S. taxes, according to a new report from the U.S. Public Interest Research Group and Citizens for Tax Justice.
The report finds that 367 Fortune 500 companies maintain 10,366 tax-haven subsidiaries overseas in places like the Netherlands, the Cayman Islands and Bermuda. That allows them to stash nearly $2.5 trillion in profits offshore — and indefinitely defer taxes on that money. Just 30 companies are responsible for $1.65 trillion, or two-thirds of the total.
U.S. tax law allows American companies to defer taxes on profits that are earned abroad, but critics say that some companies take advantage of these rules to avoid paying Uncle Sam on money earned in the United States.
“Corporate tax dodging may be legal, but it’s certainly not good for everyday taxpayers and responsible small businesses,” Michelle Surka, an advocate with the U.S. Public Interest Research Group said in a statement. “It disadvantages small businesses that don’t have scores of tax lawyers, creates an economic environment that favors accounting tricks over innovation and real productivity, and forces the rest of us to foot the bill.”
Among the “worst offenders,” according to the study’s authors, are Apple, which has booked $214.9 billion offshore, avoiding $65.4 billion in U.S. taxes; Citigroup, which has booked $45.2 billion offshore for tax, saving $12.7 billion in U.S. taxes; and Nike, which holds $10.7 billion offshore for tax purposes, avoiding $3.6 billion in U.S. taxes.