Blog

Revealing Big Pharma’s tax dodging: The story behind the numbers

By Robbie Silverman

Critics may argue the data we base our calculations on is incomplete, the methodology with which we calculate tax loss figures simplistic. And they are right.

Our tax loss estimates are rough because corporate secrecy limited our access to data. We analyzed information for only a small subset of the dozens of countries in which pharma corporations operate, and only a subset of their subsidiaries in those countries. The data we found is just the tip of the iceberg, especially for developing countries.

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The Downside of Boston’s Luxury Building Boom

By Chuck Collins

Boston is being transformed by a luxury housing boom. A decade from now, the city’s skyline and population demographics will be fundamentally altered by decisions being made today.

This boom has clear benefits, providing jobs in the building trades and increasing property tax revenue for the city. And the city has negotiated for affordable housing set-aside or linkage funds from some projects. But the boom is not doing enough to address Boston’s acute affordable housing crisis and will accelerate economic inequality in the city.

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New Study Confirms Offshore Earnings are Flowing into Stock Buybacks, Not Jobs and Investments

By Richard Phillips

For years, corporations stockpiled profits offshore to avoid paying U.S. taxes, with the sum growing to $2.6 trillion by 2017. Corporate apologists suggested that this cache was necessary because the corporate tax rate was too high, and they asserted that if the United States lowered its tax rate, corporations would repatriate those profits, pay taxes, invest in workers and we’d all win.

In 2016, then candidate Trump claimed there is as much as $5 trillion overseas and a tax break on those earnings would cause “all of this money to come back into our country” and “turn America into a magnet for new jobs.”

Based on previous experience with a repatriation holiday in 2004, critics argued that another repatriation tax break would be a major windfall to corporations that would enrich shareholders and accomplish little else.

In the end, corporations and their allies got their way.

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Major U.S. Businesses Endorse Ending Anonymous Companies

By Clark Gascoigne

Commercial Support for Ownership Disclosure Grows as National Foreign Trade Council Backs Incorporation Transparency

Momentum continues to build in the fight to tackle the abuse of anonymous shell companies.

Richard Sawaya, the vice president of the National Foreign Trade Council, which represents major U.S. multinational businesses, just endorsed cracking down on money laundering and anonymous shell companies in a new op-ed in The Hill regarding Russia sanctions.

While the FACT Coalition takes no position on most of the content in the op-ed, the penultimate paragraph of the article says:

“Congress should focus on… incorporating new ideas… that would crack down on Russian money laundering and shell corporations, expose the financial crimes of Putin cronies, and prevent U.S. real estate from being a haven for kleptocrat money, all without measurably hurting the U.S. economy.”

NFTC—whose’s board of directors consists of major U.S. businesses including Caterpillar, Coca-Cola, Exxon, Fluor, General Electric, Pfizer, Procter & Gamble, and Walmart—joins the entire financial services industry, the National Association of Realtors, the vast majority of small business owners, and other large companies such as Dow Chemical, Unilever, and Salesforce in pushing for incorporation transparency.

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Perilous Position: The U.S. Must Strengthen Transparency Laws for the Sake of National Security

By Peter Munro

These past few months, the fight against illicit finance received excellent news — the U.K. Government moved to require their Overseas Territories to disclose the real owners of companies they incorporate. Those territories include tax haven A-listers like Bermuda, the Cayman Islands, and the British Virgin Islands. These critical legislative actions taken by the British Government should similarly be adopted by the U.S. Congress — lest America risk becoming the favorite haven for dirty money.

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Do the B Team’s Tax Principles Raise or Lower the Bar? A Debate with TJN

By Adam Kanzer

On February 1, the B Team published “A New Bar for Responsible Tax: The B Team Responsible Tax Principles,” with the endorsement of nine corporations (Allianz, BHP, Maersk, Natura, Repsol, Safaricom, Shell, Unilever and Vodafone). I was privileged to serve as a member of the Company Working Group that oversaw the development of the Principles over the course of 2017, representing an investor perspective.

After several years of engagement with a variety of corporations on these issues on behalf of Domini Impact Investments, I am optimistic that the B Team’s work establishes a promising platform for meaningful dialogue with corporations about their tax practices. The Principles are not perfect, but I believe they represent an important step forward.

I was therefore very disappointed to see TJN’s critique of the Principles, The B-Team: Lowering the bar for tax transparency? I reached out to Alex Cobham, Chief Executive of Tax Justice Network, and both of us felt that our exchange would be worth sharing, as other organizations evaluate the B Team principles for themselves.

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New Legislation Would Close Significant Offshore Loopholes in the Tax Cuts and Jobs Act

By Richard Phillips

The Tax Cuts and Jobs Act (TCJA) was a historic opportunity to reform the international tax code and finally put an end to the rampant shell games played by U.S. companies to avoid taxes. Unfortunately, the TCJA will likely increase offshore tax avoidance and increase the incentives for companies to move jobs and operations offshore. As a new ITEP report explains, TCJA creates many new breaks and loopholes for offshore corporate profits, and while several different bills have been introduced to close them, no one bill addresses all of them.

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Facebook Facing Shareholder Scrutiny for its Offshore Tax Avoidance

By Richard Phillips

In recent months, Facebook CEO Mark Zuckerberg has been hauled before lawmakers in the United States and the European Union to respond to criticism of the company’s privacy policies and sharing of user data. Now the company’s dodgy tax practices are facing increased scrutiny from an even more important source: some of its own shareholders. In advance of its annual shareholders meeting on May 31, Facebook was confronted with a shareholder resolution (Proposal 8 on pg. 59) asking it to endorse a set of principles to guide its tax policy and to ensure that such principles consider the impact of its tax strategies on local economies and public services. The resolution is a signal from a group of concerned shareholders that Facebook’s tax avoidance hurts its reputation, the communities in which it operates, and creates financial risks to the company’s shareholders.

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There Is No Evidence That the New Tax Law Is Growing Our Economy or Creating Jobs

By Steve Wamhoff

Last week, the House Ways and Means Committee held a hearing on the Tax Cuts and Jobs Act (TCJA). Proponents of the law used the occasion to tout its alleged economic benefits and argued that its temporary provisions should be made permanent. The title of the hearing was “Growing Our Economy and Creating Jobs,” but there is little evidence that the law does either of these things.

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New UK Law May Shut Down the Biggest Tax Havens — Aside from the U.S.

By Steve Wamhoff

The United Kingdom’s parliament has enacted a new law requiring its overseas territories — which include notorious tax havens like Bermuda, the Cayman Islands, and the British Virgin Islands — to start disclosing by 2020 the owners of corporations they register.

This could shut down a huge amount of offshore tax evasion and other financial crimes because individuals from anywhere in the world, including the United States. have long been able to set up secret corporations in these tax havens to stash their money.

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