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. [1]

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. [2]

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. [3]

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. [4]

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.

[1] OSPIRG Foundation, June 2014, “Offshore Shell Games 2014: The Use of Offshore Tax Havens by Fortune 500 Companies.”
[2] OSPIRG Foundation, January 2013, “The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure from Tax Loophole Abuse.”
[3] OSPIRG Foundation, April 2014, “Picking Up the Tab 2014: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens.”
[4] 
Oregon Revised Statute 317.715

Issue updates

News Release | OSPIRG Foundation | Budget, Tax

Report: Oregon gets a “C+” for economic development transparency

Oregon received a “C+” for making critical information about how governments are subsidizing business projects with taxpayer dollars readily available to the public online, according to a new report from OSPIRG Foundation and Frontier Group. Following the Money 2019, the organization’s tenth evaluation of online government spending transparency, gives 17 states a failing grade, while only four states received a grade of “B” or higher. Oregon is ranked #5 in the country.

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Following the Money 2019

Citizens’ ability to understand how their tax dollars are spent is fundamental to democracy. Budget and spending transparency holds government officials accountable for making smart decisions, checks corruption, and provides citizens an opportunity to affect how government dollars are spent.

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Study: Offshore Tax Havens Cost Oregon $175 million annually

Portland, OR - Oregon loses $175 million in tax revenue each year due to corporate tax avoidance, largely through abuse of offshore tax havens, according to a new report. The report by OSPIRG Foundation and the Institute on Taxation and Economic Policy, “A Simple Fix for a $17 Billion Loophole,” comes as the state legislature convenes with eyes towards closing an estimated $623 million budget shortfall. According to the report, adopting worldwide combined report, or “Complete Reporting” would allow the state to recapture lost revenue from corporate tax avoidance, which would account for more than half of the anticipated shortfall in the 2019-2020 budget cycle.

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Report | OSPIRG Foundation | Tax

A Simple Fix for a $17 Billion Loophole

Every year, corporations use complicated schemes to shift U.S. earnings to subsidiaries in offshore tax havens—countries with minimal or no taxes—in order to reduce their state and federal income tax liability by billions of dollars.

Meanwhile, smaller, wholly-domestic U.S. businesses cannot game the system in the same way. The result is that large multinational businesses compete on an uneven playing field, avoiding taxes that their small competitors must pay. Innovation in the marketplace is replaced by innovation in the tax code.

> Keep Reading
News Release | OSPIRG Foundation | Budget

NEW REPORT: Oregon Receives “B-“ on Transparency of Government Spending

Oregon received a “B-” for its government spending transparency website, according to “Following the Money 2018: How the 50 States Rate in Providing Online Access to Government Spending Data,” the eighth report of its kind by OSPIRG Foundation and Frontier Group.

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News Release | OSPIRG Foundation | Budget, Tax

Report: Oregon gets a “C+” for economic development transparency

Oregon received a “C+” for making critical information about how governments are subsidizing business projects with taxpayer dollars readily available to the public online, according to a new report from OSPIRG Foundation and Frontier Group. Following the Money 2019, the organization’s tenth evaluation of online government spending transparency, gives 17 states a failing grade, while only four states received a grade of “B” or higher. Oregon is ranked #5 in the country.

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News Release | OSPIRG Foundation | Tax

Study: Offshore Tax Havens Cost Oregon $175 million annually

Portland, OR - Oregon loses $175 million in tax revenue each year due to corporate tax avoidance, largely through abuse of offshore tax havens, according to a new report. The report by OSPIRG Foundation and the Institute on Taxation and Economic Policy, “A Simple Fix for a $17 Billion Loophole,” comes as the state legislature convenes with eyes towards closing an estimated $623 million budget shortfall. According to the report, adopting worldwide combined report, or “Complete Reporting” would allow the state to recapture lost revenue from corporate tax avoidance, which would account for more than half of the anticipated shortfall in the 2019-2020 budget cycle.

> Keep Reading
News Release | OSPIRG Foundation | Budget

NEW REPORT: Oregon Receives “B-“ on Transparency of Government Spending

Oregon received a “B-” for its government spending transparency website, according to “Following the Money 2018: How the 50 States Rate in Providing Online Access to Government Spending Data,” the eighth report of its kind by OSPIRG Foundation and Frontier Group.

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News Release | US PIRG | Tax

U.S. PIRG Statement on House Tax Bill

Below is a statement from U.S. PIRG Program Advocate Michelle Surka on the proposed House tax bill's impacts on our debt:

“The Tax Cuts and Jobs Act, introduced this morning in the House, is an exercise in fiscal recklessness, exploding the budget deficit while failing to close the biggest tax loopholes and relying on gimmicks to obscure the impact on the national debt. Rather than make prudent trade-offs to achieve the President's promised tax cuts, this bill twists itself into knots attempting to distract from the bottom line: it will add trillions to our deficit."

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News Release | OSPIRG Foundation | Tax

STUDY: 73% of Fortune 500 Companies Used Tax Havens in 2016

In 2016, 73 percent of Fortune 500 companies – including Nike headquartered in Oregon- maintained subsidiaries in offshore tax havens, according to “Offshore Shell Games,” released today by OSPIRG Foundation and the Institute on Taxation and Economic Policy. Collectively, multinationals reported booking $2.6 trillion offshore, with just 30 companies accounting for 68 percent of this total, and just four companies accounting for a quarter of the total.

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Result | Tax

No tax giveaway for Comcast

The Oregon Department of Revenue has denied Comcast a big payday at taxpayer expense, following a public outcry and petitions from thousands of Oregonians across the state opposing a tax giveaway for the internet giant.

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Result | Tax

More Transparency for Economic Development Subsidies

After an outcry from the public, Governor Kitzhaber’s administration brought more transparency to economic development subsidies—giving Oregon taxpayers more tools to be able to track their return on investment through the Oregon Transparency Website. 

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Result | Budget, Tax

OSPIRG Brings Transparency to Major Tax Subsidy

After OSPIRG filed a petition for public records order, the Oregon Department of Justice ordered Business Oregon, the state's business development department, to release data about the Strategic Investment Program--a major tax subsidy program estimated to cost Oregon taxpayers $322 million over the next two years, stating that there is a “strong public interest” in disclosing the information.

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Result | Budget, Tax

MAKING GOVERNMENT ACCOUNTABLE TO THE PUBLIC

This year, the Oregon Legislature passed a groundbreaking new law in 2011 that will allow the public to see exactly which companies are receiving tax subsidies and what taxpayers get in return.

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Result | Budget, Democracy, Tax

Google Government Coming to Oregon

The Oregon Legislature gave final approval to HB 2500 this morning, which sets up a one-stop website for taxpayer spending.

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Report | OSPIRG Foundation | Budget, Tax

Following the Money 2019

Citizens’ ability to understand how their tax dollars are spent is fundamental to democracy. Budget and spending transparency holds government officials accountable for making smart decisions, checks corruption, and provides citizens an opportunity to affect how government dollars are spent.

> Keep Reading
Report | OSPIRG Foundation | Tax

A Simple Fix for a $17 Billion Loophole

Every year, corporations use complicated schemes to shift U.S. earnings to subsidiaries in offshore tax havens—countries with minimal or no taxes—in order to reduce their state and federal income tax liability by billions of dollars.

Meanwhile, smaller, wholly-domestic U.S. businesses cannot game the system in the same way. The result is that large multinational businesses compete on an uneven playing field, avoiding taxes that their small competitors must pay. Innovation in the marketplace is replaced by innovation in the tax code.

> Keep Reading
Report | OSPIRG | Budget

Following the Money 2018

All 50 states now operate websites to make information on state expenditures accessible to the public. All but four states provide checkbook-level data for one or more economic development subsidy programs and more than half of states make that subsidy data available for researchers to download and analyze. These websites not only provide citizens with useful information, they are regularly used by citizens; in 2017 alone, at least 1.5 million users viewed over 8.7 million pages on state transparency websites.

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Report | OSPIRG Foundation | Tax

Offshore Shell Games 2017

U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to paying taxes. Corporate lobbyists and their congressional allies have riddled the U.S. tax code with loopholes and exceptions that enable tax attorneys and corporate accountants to book U.S.-earned profits in subsidiaries located in offshore tax haven countries with minimal or no taxes. Often a company’s operational presence in a tax haven may be nothing more than a mailbox.

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Report | OSPIRG | Tax

Picking Up the Tab

Every year, corporations and wealthy individuals use complicated gimmicks to shift U.S. earnings to subsidiaries in offshore tax havens – countries with minimal or no taxes – in order to reduce their federal and state income tax liability by billions of dollars. While tax haven abusers benefit from America’s markets, public infrastructure, educated workforce, security and rule of law – all supported in one way or another by tax dollars – they avoid paying their fair share for these benefits. 

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Pages

Blog Post | Democracy, Health Care, Tax

2018 Legislative Session Recap | Charlie Fisher

On March 3rd, the state legislature adjourned a four-week “short session.” See how our main priorities fared in the legislature.

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Blog Post | Tax

Repealing Oregon's Tax Havens Law is a Premature and Likely Misguided Decision | Charlie Fisher

In 2013, the Legislature unanimously adopted HB 2460, which identified an extensive list of tax haven countries and required Oregon corporate tax filers to add income from any subsidiaries in those countries to their Oregon taxable income. The measure was based on a successful 2003 Montana law, and a May 2017 report from the Legislative Revenue Office estimated that it kept more than $20M in Oregon during the 2014 tax year, rather than being parked in offshore tax havens such as the Cayman Islands.[i]

Unfortunately SB 1529A, scheduled for a work session in the House Revenue Committee, repeals this landmark law. Presumably, the reasoning behind this repeal is that federal tax reform will prevent further tax havens abuse. We think is analysis is premature and likely incorrect.

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Blog Post | Tax

'Tis the Season for More Transparency

At the end of every year, the Oregon Transparency Website gets updated, bringing stockings filled with the state’s detailed checkbook, presents of budgets and public meeting notices and, hopefully this year, critical details about corporate economic development tax subsidies.

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Blog Post | Tax

Would you pay $170 for a 15 page document (that you should already have)?

In the next two years, Oregon taxpayers are projected to spend an estimated $665 million on corporate tax subsidies that are intended to create jobs and promote economic growth. Unfortunately, these same Oregon taxpayers have to overcome substantial hurdles when seeking the most basic information about these subsidies. 

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Blog Post | Tax

Offshore Tax Havens Cost Oregon Taxpayers Dearly | David Rosenfeld

Just in time for Tax Day, OSPIRG released another fine piece of work from our national Budget and Taxes guru Phineas Baxendall.  The report-Picking up the Tab: Average Citizens and Small Businesses Pay the Price for Offshore Tax Havens-examines the practice of hiding legitimate U.S. profits and income in offshore tax havens. While this has mostly been discussed as a federal matter, the topic has a big impact on Oregon taxpayers, small businesses and state revenue.

> Keep Reading

Pages

News Release | OSPIRG Foundation

Oregon received a “C+” for making critical information about how governments are subsidizing business projects with taxpayer dollars readily available to the public online, according to a new report from OSPIRG Foundation and Frontier Group. Following the Money 2019, the organization’s tenth evaluation of online government spending transparency, gives 17 states a failing grade, while only four states received a grade of “B” or higher. Oregon is ranked #5 in the country.

Report | OSPIRG Foundation

Citizens’ ability to understand how their tax dollars are spent is fundamental to democracy. Budget and spending transparency holds government officials accountable for making smart decisions, checks corruption, and provides citizens an opportunity to affect how government dollars are spent.

State and local governments spend billions of dollars every year on economic development programs in the form of forgone tax revenue and direct cash grant payments to corporations in an effort to stoke investment and job creation in a particular city, state or industry.

A review of economic development subsidy reporting in all 50 states finds that a majority of states fail to meet minimum standards of online transparency, leaving residents, watchdogs and public officials in the dark about key public expenditures. States should shine light on economic development subsidies by requiring the online publication of key transparency reports and inclusion of economic development spending in the state’s online checkbook portal to meet the expectations of citizens seeking information in the 21st century.

News Release | OSPIRG Foundation

Portland, OR - Oregon loses $175 million in tax revenue each year due to corporate tax avoidance, largely through abuse of offshore tax havens, according to a new report. The report by OSPIRG Foundation and the Institute on Taxation and Economic Policy, “A Simple Fix for a $17 Billion Loophole,” comes as the state legislature convenes with eyes towards closing an estimated $623 million budget shortfall. According to the report, adopting worldwide combined report, or “Complete Reporting” would allow the state to recapture lost revenue from corporate tax avoidance, which would account for more than half of the anticipated shortfall in the 2019-2020 budget cycle.

Report | OSPIRG Foundation

Every year, corporations use complicated schemes to shift U.S. earnings to subsidiaries in offshore tax havens—countries with minimal or no taxes—in order to reduce their state and federal income tax liability by billions of dollars.

Meanwhile, smaller, wholly-domestic U.S. businesses cannot game the system in the same way. The result is that large multinational businesses compete on an uneven playing field, avoiding taxes that their small competitors must pay. Innovation in the marketplace is replaced by innovation in the tax code.

News Release | OSPIRG Foundation

Oregon received a “B-” for its government spending transparency website, according to “Following the Money 2018: How the 50 States Rate in Providing Online Access to Government Spending Data,” the eighth report of its kind by OSPIRG Foundation and Frontier Group.

Tax

Federal Reserve provides transparency on largest bailout in U.S. history

The Federal Reserve announced that it will disclose online the names of companies receiving up to $4.5 trillion in CARES Act lending, as well as the terms of those deals. Transparency from the Federal Reserve will help ensure that federal loans intended to provide relief are used in ways that serve the public interest.

 

Budget

Groups find common ground on cutting wasteful government spending

U.S. PIRG Education Fund and the National Taxpayers Union Foundation outlined 50 bipartisan proposals for slashing wasteful U.S. government spending by $800 billion in their "Toward Common Ground 2020" report.

 

Budget

Following the Money 2019

Our 10th report on government spending transparency rates all 50 states on the degree to which they make information about corporate tax breaks and other subsidies available online.

 

Budget | U.S. PIRG

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