Enabling Criminal Activity in the U.S. and Around the World
America is one of the easiest places in the world in which to form an anonymous shell company—this facilitates crimes that victimize ordinary Americans.
Tax haven abuse undermines the fairness of our tax code. By shifting profits to offshore tax havens, multinational corporations avoid over $100 billion in taxes each year. Wealthy individuals evade an estimated $40 to $70 billion. The Stop Tax Haven Abuse Act of 2017 (S. 851/H.R. 1932) will close many of the loopholes that allow multinational companies and the wealthy to play by a different set of rules than the rest of us.
A central theme of corporate tax reform is how to create a system that works in a global economy. Several proposals have called for a territorial corporate tax system — a system in which a company only pays taxes on what it claims as profits in a given country rather than looking at the companies’ global footprint.
Below are questions and answers about territorial tax systems as outlined in recent reform proposals.
Average Taxpayers and Small Business Owners 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.
Up to $180 billion: The amount that the U.S. loses in tax revenue to offshore tax haven abuse each year.
$111 billion: Lost U.S. revenue from profit shifting by multinational corporations annually.
$40-70 billion: Lost U.S. revenue to tax evasion by wealthy individuals annually.
Quotes from prominent law enforcement officials explaining the problems with anonymous shell companies.
