Federal bailout-buddies GM and Ford are among 83 of the top 100 publicly-owned U.S. corporations indentified in a recent Government Accountability Office (GAO) investigation as having subsidiaries in foreign countries identified as tax havens.
While the GAO report on International Taxation (.pdf) makes no attempt to determine the reasons these large corporations maintain subsidiaries in countries like the Cayman Islands or Bermuda, U.S. Senators Byron Dorgan (D-ND) and Carl Levin (D-MI), suspect it is to avoid paying U.S. taxes.
Sens. Dorgan and Levin, who estimate that U.S. corporations avoid paying as much as $100 billion a year in taxes through tax haven foreign subsidiaries, want the practice stopped.
“This report shows that some of our country’s largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government,” said Sen. Dorgan in a press release. “I think we should take action to shut down these tax dodgers and we will be introducing legislation to do just that.”
According to the GAO report, Ford Motor Company maintains subsidiaries in Bermuda and the Cayman Islands, while General Motors has subsidiaries in Barbados, Bermuda, the Cayman Islands, Ireland, Singapore and Switzerland – all identified by the U.S. government as tax haven countries.
States Sen. Levin, “We need to put an end to the use of offshore secrecy jurisdictions as tax havens. We must get to the bottom of activities such as the following: Citigroup has set up 427 tax haven subsidiaries to conduct its business, including 91 in Luxembourg, 90 in the Cayman Islands, and 35 in the British Virgin Islands. Hundreds more tax haven subsidiaries operate under strict secrecy laws in places like Switzerland, Hong Kong, Panama, and Mauritius. But not all large U.S. companies are major tax haven users and there is great contrast between competitors. For example, Pepsi has 70 tax haven subsidiaries, while Coca Cola has 8; Morgan Stanley has 273, while Fannie Mae has 0; and Caterpillar has 49, while Deere has 3.”
Also See:
Big Business Pays No Taxes, GAO Finds
GAO Finds Federal Contractors Abusing Tax System
Comments
UPS delivers thousands of packages around the world every day. UPS has zero of these subsidiaries. Bank of America Corporation has one-hundred fifteen!
Barbados, Caymen Islands, and so on, are not really known as hubs of manufacturing activity, so why would any U.S. corporation need a subsidialy there? Companies such as AIG, BofA, et cetera, manufacture nothing, so need no subsidiaries whatsoever!
Smells like old dead fish to Me!!