Middle-Class Taxpayers and Domestic Businesses Foot the Bill for Offshore Tax Loopholes
Many Large U.S.-Based Multinationals Avoid Paying U.S. Taxes by Using Accounting Tricks to Make Profits Made in America Appear to Be Generated in Offshore Tax Havens—Countries with Minimal or No Taxes.
Boosting Tax Transparency to Guard Investors, Protect Taxpayers, and Inform Policymakers
Disclosing more information on where companies book profits, record revenues, and pay taxes would protect taxpayers by discouraging abusive tax avoidance schemes; protect shareholders by providing them with information about the risks associated with their investments; and inform policymakers as Congress considers overhauling the U.S. tax code.
The conversation about the dangers of anonymous companies has largely focused on corrupt foreign leaders and threats to national security, human trafficking, and disruption to business. Additional harms include bidding up prices that fuel the loss of affordable housing, environmental degradation, and tax evasion.
America Is the Easiest Country in the World in which to Form an Anonymous Shell Company.
Creating a U.S. shell company takes less information than acquiring a library card. A 2015 academic study found that the U.S. is the easiest country in the world for terrorists and criminals to open anonymous shell companies to launder their money with impunity.
The 2016 release of the Panama Papers was an avalanche of data on the nefarious use of anonymous companies for corrupt activities. The leak showed that shell companies can represent an important nexus of corruption, money laundering, transnational organized crime, and terrorism, all of which directly harm U.S. foreign policy interests. Such companies have been used to divert U.S. security and overseas development funds from their intended purposes into the hands of those who seek to do the United States harm, and they can help fund the very insurgents and terrorists U.S. troops are fighting.
Creating a U.S. shell company takes less information than acquiring a library card. A 2014 academic study found that the U.S. is the easiest country in the world for terrorists and criminals to open anonymous shell companies to launder their money with impunity.
