Tax Havens and Other Tricks Let U.S. Firms Steal $180 Billion

TOPSHOT - This photograph taken late August 11, 2018, from the French mountain of Saleve shows a nightime view of the city of Geneva at the end of Lake Geneva with its landmark Fountain which is known as "Jet d'Eau". (Photo by Fabrice COFFRINI / AFP) (Photo credit should read FABRICE COFFRINI/AFP/Getty Images)

Tax havens — the most significant include Ireland, Singapore, Switzerland, the Netherlands, Luxembourg, Hong Kong, and Bermuda — serve two purposes.

The first is tax evasion by individuals, which is illegal. Think of Russian or Nigerian plutocrats transferring their assets to small Caribbean nations with strict banking secrecy laws, freeing them from the dreary necessity of paying taxes in their home countries.

The second is tax avoidance by huge multinational corporations, which — as long as the lawyers are doing their jobs — is perfectly legal. Here imagine Apple using various forms of accounting chicanery to claim that tens of billions of its profits generated in countries with normal corporate tax rates were actually all made in Ireland, where Apple had negotiated a special 2 percent tax rate for itself. (Apple has on occasion gone even further, asserting that some of its profits were made, for the purposes of taxation, in no country at all.)

Zucman conservatively estimated in his book that tax avoidance and evasion translate into hundreds of billions of dollars in unpaid taxes every year — money that, for the most part, ends up in the pockets of the world’s wealthiest people.

via Tax Havens and Other Tricks Let U.S. Firms Steal $180 Billion

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