A new Government Accountability Office (GAO) report shows that many of the largest companies receiving bailout billions have set up hundreds of off-shore tax shelters to avoid paying taxes. Major scofflaws include Citigroup, Morgan Stanley, AIG, and Bank of America.
A majority of America’s largest publicly traded companies and the U.S. government’s largest federal contractors — including some receiving millions in federal bailout money — use multiple subsidiaries in offshore tax havens to conduct business and avoid paying U.S. taxes, a new report finds.
The new Government Accountability Office (GAO) report, released today by Sens. Byron L. Dorgan (D-N.D.) and Carl M. Levin (D-Mich.), lists Citigroup and Morgan Stanley as having set up hundreds of tax haven subsidiaries, along with American International Group and Bank of America. Also in the tax-haven list are well-known companies and such federal contractors as American Express, Pepsi and Caterpillar.
GAO, searching publicly available data filed with the Securities and Exchange Commission, determined that 83 of the 100 largest publicly traded corporations and 63 of the 100 largest federal contractors maintain tax havens in 50 subsidiaries. Dorgan and Levin said they requested the updated report from one several years ago because they are focused on combating offshore tax abuses, which they estimated cause $100 billion in lost U.S. tax revenue each year.
“This report shows that some of our country’s largest companies and federal contractors, many of which are household names, continue to use offshore tax havens to avoid paying their fair share of taxes to the U.S. And, some of those companies have even received emergency economic funds from the government,” Dorgan said. “I think we should take action to shut down these tax dodgers, and we will be introducing legislation to do just that.”
To illustrate the problem, Levin said the report found that Citigroup has set up 427 tax haven subsidiaries to conduct its business, including 91 in Luxembourg, 90 in the Cayman Islands and 35 in the British Virgin Islands. He said other havens include Switzerland, Hong Kong, Panama and Mauritius.