A new report from non-profits organizations Citizens for Tax Justice and the US Public Interest Research Group has shown that companies on the Fortune 500 list hold an astonishing amount of money overseas in tax havens.
Companies on the Fortune 500 list all use international banking laws to benefit their bottom line, but a recent study reveals just how much in accumulated profits never made its way back into the US economy. According to a report from Reuters, America’s 500 largest companies have stashed over $2.1 trillion in profits to avoid paying United States taxes.
If these profits had been reported in the US, the estimated tax owed would approach $620 billion. The study was carried out by non-profits Citizens for Tax Justice and the US Public Interest Research Group, who found that 75 percent of the firms on the Fortune 500 list own subsidiaries in countries like Bermuda, Ireland, Luxembourg, and the Netherlands, which all have relatively lax banking laws.
Using publicly available financial reports submitted to the Securities and Exchange Commission, the two non-profits found that companies stored unbelievable amounts of cash in foreign lands.
Apple Inc, for instance, was found to be holding $181.1 billion offshore, which would amount to a $59.2 billion tax bill here in the United States. General Electric holds a reported $119 billion in 18 different subsidiaries; Microsoft holds $108.3 billion in five tax havens, and pharmaceutical company Pfizer currently holds profits of $74 billion in 151 different subsidiaries.
Collectively, the companies in the study held money in 7,622 different tax haven subsidiaries. The companies collectively paid about 6 percent in taxes, compared to the 35 percent they would pay in the United States.
The study urged Congress to act and prevent companies from using international banking laws to their advantage, and to bring equality back to the US tax system.