TRENTON – A new report says that not only do offshore tax havens deny U.S. coffers of more than $100 billion a year, but to put it in a statewide perspective, the average N.J. taxpayer would have to fork over an extra $668 a year to make up for that lost revenue.
The report released today by NJPIRG, “Picking Up the Tab,’’ says that multinational corporations account for about $60 billion of that $100 billion.
The report by the Public Interest Research Group says that small businesses across the nation would have to pay an additional $2,116 each in extra taxes to compensate for the money that the multinational corporations avoid paying.
Even though the practices are legal, NJPIRG recommends solutions to restore fairness and balance:
- End the ability of the multinationals to defer paying taxes on profits attributed to foreign entities;
- Reject adoption of any type of territorial system under which a multinational could shift funds to a country with a lower tax rate;
- End the ability of companies to hide owners’ identities and profit origins under shell companies.
These and other recommendations are included in the report whose release is timed to coincide with the approach of tax day.
“When corporations shirk their tax burden by using accounting gimmicks to stash profits legitimately made in the U.S. in offshore tax havens like the Caymans, the rest of us must pick up the tab,” Gideon Weissman, program associate with NJPIRG, said in a release.
“Responsible small businesses don’t just foot the bill for corporate tax dodging, they are put at a competitive disadvantage since they can’t hire armies of well paid lawyers and accountants to use offshore tax loopholes.”
N.J. Rep. Frank Pallone, (D-6), lent his support today toward legislation that would end some of these practices.
The Stop Tax Haven Abuse Act (HR2669) and the Cut Unjustified Tax Loopholes Act (S2075), would address these issues, he said.
“This legislation would close many of the loopholes that certain companies currently abuse for their own benefit,” Pallone said. “It would be a significant step towards fairness in our tax system.”
Other N.J. co-sponsors of the House proposal include Rush Holt, (D-12); Bill Pascrell, (D-8); Steve Rothman, (D-9); and Rob Andrews, (D-1).