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The British Virgin Islands – the very name conjures up a Caribbean paradise of soft sand beaches, tropical breezes, and the leisurely island lifestyle. Surprisingly, though, this tiny spot is home to more than 400,000 major corporations!
Not that you’d find any factories, corporate headquarters, or even employees on the islands. Indeed, all 400,000 companies are located in one gray, two-story building on the island of Tortola. This is where the global giants register incorporation papers for their very special subsidiaries. You see, the place is a tax haven. By registering there, corporations can claim they are based on the islands – even though they do no business there – letting them dodge paying taxes back home.
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This is the kind of scam that President Obama intends to stop. He has recently proposed to close loopholes that allow such giants a Goldman Sachs, Microsoft, Citigroup, Pfizer and Procter & Gamble to hide income in order to shirk their tax responsibilities to America.
Corporate America, whose lobbyists and political lapdogs plugged these loopholes into our taxcode, have been frequent fliers to tax havens all over the world. Of the 100 largest U.S. corporations, 83 have created subsidiaries to stash profits in these havens, located in such places as the Caribbean, Liechtenstein, the Philippines, Uruguay, and Labuan – wherever that is.
Citigroup, for example, has created 427 of these tax-avoidance subsidiaries! In the past six years, it has more than quadrupled the amount of profits it tucks into the havens, presently stashing nearly $23 billion in them. This is, of course, the same Citigroup that has taken a $45-billion bailout from us taxpayers.
To support the crackdown on this shameful corporate shell game, contact the Public Interest Research Group at www.uspirg.org.
“Tax havens under scrutiny as wealthy countries crack down,” Austin American Statesman, April 4, 2009.
“Obama Asks Curb On Havens’ Use To Limit Taxes,” The New York Times, May 5, 2009.
“New Study Highlights $100 Billion a Year Hidden in Off-Shore Tax Havens,” Press Release from U.S. PIRG, April 14, 2009.
“Obama plans corporate tax crackdown,” www.cnn.com, May 4, 2009.
“Obama cracks down on overseas tax loopholes,” www.msnbc.msn.com, May 4, 2009.
“Obama Announces Plan to Close Tax Loopholes,” www.abcnews.com, May, 2009.