TRENTON – A new report says four large companies with presences in New Jersey have more than $100 billion in offshore tax havens.
The report, by N.J. Public Interest Research Group, argues that such havens should be disallowed by Congress because they place unfair burdens on smaller businesses as a result.
The report released Wednesday says that overall, 82 of the nation’s top 100 publicly traded companies have approximately $1.2 trillion in such offshore holdings.
“When corporations use tax havens to dodge the taxes they owe, the rest of us pay the price, either through higher taxes, cuts to important programs, or a bigger deficit,” said Jen Coleman, NJPIRG Advocate, in a release accompanying the report.
A small-business owner in New Jersey called for an end to such practices.
“My small business doesn’t get special loopholes because I don’t have an army of lobbyists in Washington, D.C.,” said Evan Brownstein, owner of B. Beamesderfer Gallery in Highland Park, in a release issued with the report.
The NJPIRG report states that small businesses such as Brownstein’s framing shop and art gallery, with only two employees, are consequently put at a competitive disadvantage.
According to the report:
*Johnson & Johnson has $49 billion offshore spread among 55 subsidiaries in Ireland, Hong Kong, Luxembourg, The Netherlands, Singapore, and Switzerland.
*Prudential Financial has $1.7 billion offshore spread among 34 subsidiaries in Barbados, Bermuda, the British Virgin Islands, the Cayman Islands, Hong Kong, Ireland, Jersey, Luxembourg, and Singapore.
*Merck has $53.4 billion offshore spread among 151 subsidiaries in Bermuda, the Cayman Islands, Costa Rica, Cyprus, Hong Kong, Ireland, Latvia, Lebanon, Luxembourg, Panama, The Netherlands, Singapore, and Switzerland.
*Honeywell International has $11.6 billion offshore spread among five subsidiaries in Luxembourg, Singapore, and Switzerland.
The report said that nationwide, 15 companies with the most money offshore hold a combined $776 billion overseas, 66 percent of the nearly $1.2 trillion.
Also, according to the report, 21 of the top 100 publicly traded companies disclose the amount they would expect to pay in U.S. taxes if they didn’t keep profits offshore. These 21 companies would owe more than $93 billion in additional federal taxes. The average tax rate the 21 companies pay to other countries on this income is 6.9 percent, according to NJPIRG.
“These companies benefit from America’s infrastructure, educated workforce, security, and access to the largest consumer market in the world. They should not be able to use loopholes to get out of paying for it,” Coleman said.
NJPIRG urged support for a measure sponsored by Sen. Carl Levin, S268, which would end incentives to move profits offshore, close loopholes, strengthen enforcement, and increase transparency.