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Stop Offshore Tax Havens
Corporate tax havens cost Americans $90 billion each year, and cost Oregonians an additional $200 million in state tax revenue every year.
Many of America’s largest corporations use sophisticated schemes to shift their U.S. earnings to subsidiaries in offshore tax havens—countries with minimal or no taxes—in order to reduce their state and federal tax liability by billions of dollars. At least 362 companies, making up more than 70% of the Fortune 500, operate nearly 8,000 subsidiaries in tax haven jurisdictions as of 2013. This includes household names such as Bank of America, Nike, Apple, Microsoft, and Pfizer. 
The scale of this tax avoidance is significant. Most recent academic studies estimate that about $90 billion in federal tax revenue is lost every year to corporate offshore tax havens. Meanwhile, the state of Oregon loses an additional $200 million in state tax revenue annually to corporate tax avoidance. 
When corporations dodge taxes, individuals, small business owners and medium-sized domestic companies have to pick up the tab. This takes the form of cuts to public programs, higher tax rates, or taking on more public debt. For example, if offsetting the impact of corporate tax avoidance took the form only of tax increases spread evenly among individuals and Oregon businesses, each would have to cough up an additional $1,022 and $3,125 each year, respectively. 
Equally significant, multinational tax dodging puts the many businesses that play by letter and spirit of the rules at a competitive disadvantage. Businesses should compete on innovation and the quality of their products, not on their ability to pay for an army of clever tax attorneys and accountants. Unfortunately, the opposite is true. As a result, we have two tax systems—one for smaller companies and the sizeable domestic companies that play by the rules, and one for the corporations that use offshore tax schemes to avoid their taxes. The winners of this system are large multinationals like banks, high tech companies, and pharmaceutical companies, and the losers are retailers, small businesses, and ordinary taxpayers, who are forced to pick up the tab for tax haven abuse.
It’s not illegal, but it’s not right.
There are a number of ways in which lawmakers can and should crack down on corporate tax avoidance. Oregon lawmakers took a great first step in 2013 by approving a law that required companies to treat income reported to offshore subsidiaries in particularly notorious tax havens like the Cayman Islands as domestic income. 
OSPIRG is pushing for more commonsense changes like this that simply say that if corporations are based here and generate profits here, then they should, like all of us who earn income here, pay the taxes they owe.
 OSPIRG Foundation, June 2014, “Offshore Shell Games 2014: The Use of Offshore Tax Havens by Fortune 500 Companies.”
 OSPIRG Foundation, January 2013, “The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure from Tax Loophole Abuse.”
 OSPIRG Foundation, April 2014, “Picking Up the Tab 2014: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens.”
 Oregon Revised Statute 317.715
Tools & Resources
Oregon Department of Justice
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