You don’t benefit from it, but you pay for it as a result of the government losing out. Yes, the government complacently sits back and does nothing while tax havens enable people to put their money hidden away in some secret off-shore excuse for a bank while at the very same time the taxpayer ends up paying for what the state is losing out on. Why is it that it’s the little guy stuck in the middle that gets pushed around, shoved into a corner for him to have his nose pummeled by the taxes levied on him, instead of the ones that are putting the money away in those off-shore financial generators? It’s not as if it’s just a couple of dollars per person. No, the sum that every American citizen ends up paying because of that works out to roughly $1,259 extra on their tax bill. Yes, the state is hardly going to allow the shortfall to go amiss and it’s the average American that end sup picking up the tab.
According to research carried out by US Public Interest Research Group in Boston, there are some $150 billion in federal revenue and $34 billion in state revenue that goes down the plug-hole into some off-shore banker’s vaults. It’s all stashed away by wealthy corporations and high-net-worth individuals that want to (and therefore have the financial ability to) avoid paying their taxes in the USA. Estimates show that corporations account for about $110 billion of the total that is lost and private individuals make up what’s left.
93% of the profit made for corporations between 2008 and 2013 was through off-shore companies, meaning that they were paying no tax in the USA. Great, so now we understand just why (well, one of the reasons apart from the Federal Reserve blunder on Quantitative Easing and the far-from-wise handling of the economy by Ben Bernanke and his pals) the economy hasn’t actually budged an inch in the right direction.
The loony loophole that we are all paying for is that any corporation can avoid paying federal income tax on offshore profits. Easy, and you can’t even call it a loophole. It’s a clear-cut measure to allow those corporations to benefit from the non-payment of taxation in the USA. Not only do those corporations manage to avoid paying taxes in the USA on a federal level, but they don’t have to pay tax in the states where they are operating. Nice! Why not let us all set up our own corporation, or even better all Americans should join forces, create the People’s Corporation, headquarter ourselves in the Cayman Islands and then refuse to pay both federal and state taxes since we will be based offshore, operating within the USA and exploiting the so-called loophole.
290 of the top Fortune 500 companies in 2013 held $1.6 trillion of their profits in accounts located in tax havens. That was an increase from $1.1 trillion in profits in 2009. Nice little earner this business, isn’t it?
If you live in California, New York and New Jersey, then you’re suffering the most since it’s in those states that there are the most tax dodgers.
But, it’s fighting a losing battle sometimes where all of this is concerned. Do we really believe that the people that earn the most, those that have their own savings in offshore accounts are really going to put an end to his? Taxes were never made to be fair. They were intended to share the money (that was the idea) and provide for those that needed it so that we had a better world. The real reason taxation might have been invented is to filter the money of the people through the hands of those that meet in the corridors of power. Ah! Well, as the humorist Will Rogers once said “it’s a good thing we do not get as much government as we pay for”. Always look on the bright side of life…
The average American ends up paying that shortfall in government revenue simply because without that money the state cuts spending, increases taxes and establishes an order of priority of who gets what and how much is dished out.
Remember as someone once said, you don’t pay taxes, they take taxes!
Originally posted: You Pay For Tax Haven Bliss