US multinationals dodge $180 billion in taxes on foreign profits per year

Whoa, Nellie: talk about wars for oil extortion and profiteering!  But actually, part of the grifting is among USian non-oil multinationals as well.

From Barry Grey, wsws.org, 10 November 2018

“US multinational corporations are plundering the populations of the United States and the world to the tune of trillions of dollars by driving down and evading taxes on profits booked overseas. This is the conclusion that emerges from a recent study by University of California at Berkeley economist Gabriel Zucman and British economist Thomas Wright.

Their paper, titled “The Exorbitant Tax Privilege,” points to the use of US military violence to drive down taxes on American oil multinationals by oil-producing states and a massive expansion of non-oil US firms booking their overseas profits in tax haven countries to generate huge tax savings and increased profits. The statistics the authors provide translate into $180 billion a year in tax savings on US multinationals’ overseas operations.

This is money diverted from government revenues in the US and around the world and funneled into the bank accounts and stock portfolios of the global financial oligarchy. In what amounts to an international extortion racket and swindling operation, the US government and both big business parties function as the enforcers of the American corporate elite.”

With an accompanying chart from the paper, Grey writes that US oil companies had been paying an on-average tax rate of 70% from 1996-1990, and that after the first gulf war in 1990-1991  the rate was reduced to 45% on average.

“They write: “The foreign tax rates of US oil multinationals fell significantly after the first Gulf War, during which the United States (and a number of other countries with significant investments in oil) intervened to protect Kuwait, a major oil producer.

“Although it is not possible to know for sure what caused this decline, a possible interpretation of the fall in the taxes collected by oil-producing countries… is that they reflect a return on military protection granted by the United States to oil-producing States.”

This is diplomatic language to suggest that the United States used its destruction of Iraq through military violence and deadly sanctions to extort foreign governments to lower their tax rates on American multinationals. To put it more bluntly, the super-profits obtained by ExxonMobil and other mega-monopolies are based in significant part on the blood and bones of millions of men, women and children killed and injured in Iraq, Libya and other Middle Eastern oil-producing countries, as well as tens of thousands of US soldiers.

Non-oil US multinationals have effected a dramatic reduction in taxes paid on overseas investments primarily by accelerating the shift of profit bookings to tax haven countries. Zucman and Wright report that American multinationals’ profits booked in offshore tax havens increased from 20 percent of total US overseas profits in the first half of the 1990s to 50 percent today.”  (with an accompanying chart)

These havens include countries such as Ireland, Luxemburg, the Netherlands, Switzerland, Singapore, Bermuda and Caribbean tax havens.”

Apparently the sharp shift in off-shoring profits came in the 1990’s began with the removal of US Treasury tax restrictions under Bill Clinton in 1996, underscoring, as he writes, the bipartisan nature of the systematized transfer of wealth from the working class to the financial elite.  The authors of the report note that while other nations without tax avoidance laws put their profits in tax haven nations, the US is Number One with 50%!

“The $1.5 trillion tax cut signed into law last December by President Trump, the benefits of which go overwhelmingly to corporations and the rich, provides additional windfalls for US multinationals that have parked trillions of dollars in profits in foreign tax havens to evade US taxes. Besides cutting the legal corporate tax rate from 35 percent to 21 percent (the real, or “effective,” rate is much lower), the law allows companies such as Apple and Google to repatriate their overseas profits at a discounted tax rate of 8 percent to 15 percent, depending on the nature of the assets.”

Grey writes that Boss Tweet’s law has already meant that between Jan. and June of 2018, corporate taxes dropped by $50 billion, a decline of one third over 2017.  Then he writes that this destroys the cynical claim that corporations would use their tax savings to create jobs with decent pay, as the bucks are being used in stock buy-back schemes for paying increasing dividends to stockholders who purchase yachts, private islands…I’d add havens in New Zealand to weather…whichever next apocalypses come next.

He next claims that the $180 billion is six times the $30 billion needed to end world hunger, but I wouldn’t take that number…to the bank, so to speak.

‘Tax evasion helps US corporations steal $180bn from the rest of the world every year’ via RT, 9 Nov, 2018, has the Cliff Notes version, but oh, look: this morning’s headline is that the US Treasury Dept. has disconnected Iran from the SWIFT Messaging.  RT adds:

“According to James Henry, investigative economist and senior advisor at Tax Justice Network, America’s wealthy kleptocrats, tax-dodgers, and particularly multinational companies have been massively parking money offshore. He told RT that by 2017 US multinationals have “accumulated about $2.6 trillion offshore while they didn’t have to pay the 35 percent US corporate tax.” [snip]

“The US’ accumulated foreign debt exceeds that of any other country, standing at about $8 trillion, or more than 40 percent of the US gross domestic product (GDP). That $8 trillion is the difference between $35 trillion in foreign investments in US assets and $27 trillion in US investments in foreign assets.”

I know that these numbers might pale in comparison to “We’ve Reached Never, Never Land” – Missing $21 Trillion – Part 1, gulfgal98 on Mon, 10/29/2018, caucus99percent.com, but still, a few hundred billion here, a few hundred billion there, sooner or later it adds up to a hella lot of extra profits for the tax swindlers.

In other financial weirdness news: Bank of England refuses to hand over Venezuela’s gold – report’, RT, 9 Nov, 2018

“British officials are insisting that measures aimed at preventing money-laundering are taken, The Times reports. The Venezuelan government is reportedly expected to provide a clarification about its plans for the gold.

“There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain,” the media reports citing unnamed sources.”

This is the take on it from venezuelanalysis.com: ‘Venezuela Looks to Dodge Sanctions & Repatriate Gold from Bank of England’, Nov. 7, 2018

(cross-posted from Café Babylon)

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I remember this no skin in the game argument by right wingers over poor people not paying federal taxes. The argument was that even poor people should have to pay some taxes so they have "skin in the game". Apparently, corporations believe they don't need to have skin in the game.

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wendy davis's picture

@MrWebster

but thanks for bringing it, lol. translated: 'even useless eaters need to be better wage slaves'. but just to be fair, Mr.Webster, amerikan multinationals at least have some of the dead skin cells that slough off 'em...in the game. ; )

i really hadn't had any idea about big dawg clinton in this mess, but add that to tanking glass-steagal and (oh lordie, the companion piece?), and obomba's 3-day 'angelides' version of the televised weeks-long pecorra commission, and tanking anything remotely helpful for the non-wall streeters, we ended u with dodd-frank. and it's all rolling toward another big bubble pop breakdown, as far as we can tell.

Vote for us: We suck less than the Other Guys!

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wendy davis's picture

@wendy davis

went to wash up some dishes and i'd remembered: Commodity Futures Modernization Act of 2000, CFMA the wiki). dinnae read the wiki. maybe bill clinton's minions had written it, lol.

oddly, being around water makes my memory work better somehow. perhaps i should live in a tank?

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divineorder's picture

At least SOMEONE is talking anti-corruption liegislation n D.C. Say what we will, maybe a few others will join us woke ones as a consequence of her run for Pres if she campaigns on this? She can't save us of course,she is a capitalist, yadda yadda yadda. Still, I like this particular bill.

Heh. It won't pass, but at least it broadens the conversation.

Oh well, so many imperfect untrustworthy leaders. It is up to us, but what power do we have, let us to continue to wallow in despair, brothers and sisters. The end is certainly nigh.

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

wendy davis's picture

@divineorder

it's who i've been ever since i began blogging back in the stone age. well, yes, to widening the overton window, and i'm glad she at least mentioned one D. i admit, a couple references i hadn't quite gotten in my ignorance. i'd first groaned: homework? glad it wasn't a long read.

2 Qs, though: folks here talk about being 'woke', and i reckon everyone who claims to be might have a different meaning; what's yours? and what's a divineorder, please?

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@wendy davis I have tried to figure that out..if it's even possible for me to be.

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wendy davis's picture

@Snode

it may be 'woke' to certain truths of x, Y, or Zed, not all, perhaps over-lapping, tra la la. but even the urban dictionary has many examples, as with 'in the matrix, having taken the red pill, as in: don't go back to sleep. stay aware.

i'd seen it used rather irregularly here, though, so was just wonderin' is all. woke to the US is an oligarchy. woke cuz we listen to jimmy dore, and so on.

thanks, perhaps woke amigo. ; )

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@wendy davis I sort of have an idea...mainly through TOP. There it's used as a hammer, and shaming with out the education. Sort of like the people who potty train their dog by rubbing their nose in the poo and whacking them with a rolled up newspaper. It doesn't help the dog understand. I guess there's other ways but I kinda shy away from the whole thing.

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wendy davis's picture

@Snode

head-scratcher for me, snode, if you mean used as an insult. but never mind, it seems i've accidentally hijacked my own thread, dagnabbit.

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@wendy davis good question, though.

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wendy davis's picture

@Snode

i started it w/ the Q. but i never found out what a divineorder is, lol. an 11th commandment? ; )

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divineorder's picture

@wendy davis @wendy davis @wendy davis @wendy davis @wendy davis

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

wendy davis's picture

@divineorder

a few tips for using the c99 comment software to unclutter comments and edits, etc.?

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Big Al's picture

@divineorder It's like Obamacare only different. Plus it's just a political ploy that they should get called on for. This kind of bullshit politicking is just as bad as what they pretend to be trying to address.

Course that's just my opinion.

https://www.dailykos.com/stories/2018/8/28/1791427/-It-s-time-to-end-cor...

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divineorder's picture

@wendy davis

thang.

@Big Al @wendy davis

Woke: A Field Guide For Utopia Preppers [Caitlin Johnstone]

She is full of fine words, like these posted 7 minutes ago:

caitoz
Caitlin Johnstone7m

"What the fuck am I even watching? What is this incestuous, narcissistic circle jerk? Does the National Constitution Center exist for any other reason than for American royalty to suck each other’s dicks with golden trophies swinging from their necks?"

How To Wake Up - Caitlin Johnstone
Caitlin's prescription for being "woke" seems to be defined as nothing more than one who agrees with and submits themselves to leftist ideals. I argue that the real definition of being "woke" is no more complicated than simply seeking Truth.
[Search domain caitlinjohnstone.com] https://caitlinjohnstone.com/2018/09/01/how-to-wake-up/

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

wendy davis's picture

@divineorder

the term came from 'the matrix', but as for her saying she doesn't wish to be anyone's spiritual guru, i concur, as i wouldn't look to her to be such for me. but others may, of course. ; )

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Mark from Queens's picture

@wendy davis
has been around in African-American parlance for some time. That was told to me by an astute friend who belongs.

As with everything to that end it is all eventually co-opted by white pop culture. Please consider the embarrassing joke of Pat Boone doing Tutti Frutti and on and on, jazz vernacular of the 1930’s, blues music, sports references, etc. see George Carlin’s joke “White Harlem” (see Lenny Bruce too).

Sorry folks, on my phone, feeding kids, running back and forth to kitchen, etc so no Carlin video paste. Just a quick check in. Thanks also, Wendy, for piece on the Zapatistas. Will watch when I can.

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"If I should ever die, God forbid, let this be my epitaph:

THE ONLY PROOF HE NEEDED
FOR THE EXISTENCE OF GOD
WAS MUSIC"

- Kurt Vonnegut

wendy davis's picture

@Mark from Queens

harlem one, but i was roasting pepitas (pumpkin seeds) while i was listening, and may have missed 'woke'; it's great though. i fail 'multi-tasking 2.0' by now. we have a couple lenny bruce records, but i don't remember the term from the ones we had, although i easily could have breezed right on by. bingling 'lenny's quotes on 'woke', nuttin;.

but thanks, and i hope you can watch the videos and read the quotes from ezln/zapatistas in cranberry ink. they're in trouble again under AMLO, who's not even taken office yet.

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divineorder's picture

@Big Al
How is it like Obamacare? Or partisan? Couldn't see that from your link. Don't want to hijack here though.

(BTW I liked the Consumer Financial Protection Bureau that she was instrumental in writing. It got some substantial protections for consumers. Now in the hands of TrumpCo appointee. And Pence just broke a tie on removal of veteran protections.)

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

Big Al's picture

@divineorder not even a half measure, more like a ten percent measure, that serves to put off real reform for decades. Course, you know me, I'm not a progressive. Partisan in that Warren blames everything on Trump and his admin. She ain't gonna do a thing that will cramp the DNC style.

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divineorder's picture

@Big Al

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

divineorder's picture

@wendy davis @divineorder

Heh.

FWIW, a link to her book, with reviews at the link.

https://www.goodreads.com/book/show/37487073-woke

Woke: A Field Guide for Utopia Preppers
by Caitlin Johnstone (Goodreads Author)
4.7 ·
Rating details · 10 Ratings · 4 Reviews

An illustrated poetical guide to reclaiming the earth from the forces of death and destruction.

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

snoopydawg's picture

@Big Al

3. End lobbying as we know it.

Armies of corporate influence-peddlers flood the halls of Congress every day, but many aren’t even required to register as lobbyists. Let’s start by fixing the crummy definition of a lobbyist. And we should shine a light on ALL influence-peddling in Washington – and stop lobbyists from trading money for government favors. We can go even further by placing a lifetime ban on lobbying by high-ranking ex-officials like former members of Congress and Cabinet Secretaries.

She then says that her bill will restore public faith in our courts. Guess she wrote this before Schumer let McConnell fast track countless right wing judges that will turn the courts even more luney than they are now. Some resistance, huh?

I didn’t go to Washington to smile, nod, and write laws to help powerful people who could write big checks. No – I went to Washington to be the best Senator that money can’t buy.

I'm too lazy to check to see who her biggest donors are.

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Disclaimer: No Russian, living or dead, had anything to do with the posting of this proudly home-grown comment

Big Al's picture

@snoopydawg She does what politicians do, tell people what they want to hear when they know darn well it ain't gonna happen.

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wendy davis's picture

@snoopydawg

but couldn't tell quite how to parse the data over time. but you'll eat this with a spoon; it just came in on the popular resistance newsletter. 'Midterm Scoreboard Reveals Massive Pro-Israel Influence on Congressional Candidates', By "If Americans Knew", info clearinghouse

one photo of warren with this caption: "Senator Elizabeth Warren (D-MA) at JAC event. JAC advocates for “a strong US-Israel relationship.” See video here and here.

"Open Secrets, a project of the Center for Responsive Politics, points out, “Few lobbies dedicated to international issues are so active and well-financed as the Israel lobby.”

Open Secrets continues, “A powerful pro-Israel force has carved out an influential place in American campaigns in the form of super PAC mega-donor Sheldon Adelson.” Adelson’s contributions to national political campaigns in 2018 alone reached over $113 million – all to Republicans/conservatives."

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wendy davis's picture

@Big Al

reckon Kossacks put in her tip jar?

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Big Al's picture

Like Trump, they know how to use the system, legal and not legal, documented and not documented, to "keep" their hard earned money. Anyone in their positions would do it obviously.
They're heroes of the working class really, because they're so smart and they're fighting back against government intrusion in our lives.

Or something like that.

Since most of us, at least those of us in the 75 percent, aren't represented in Congress, doesn't that mean that we are being taxed without representation? Seems like it. If only blogs could help.

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QMS's picture

@Big Al
Clearly we know the score.

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Listen to your higher mind.

wendy davis's picture

War Machine Makes a Killing in 2018’, christian sorenson, strategic-culture.org, 11/11/2018

“September marked the end of the fiscal year, a time when the Pentagon ramps up its spending spree.

The U.S. Department of Defense spent at least $68,624,394,000 on 689 individual contracts during September 2018. This amount does not include 35 Foreign Military Sales transactions worth $2,065,896,000.

War is a racket. Here are the corporations making a killing.”

now ask yourselves which party is The War Party. ; )

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wendy davis's picture

comment thread might go, and there's been scant interest in the OP, this may be be related to the comments. his title's a play on emma goldman's "if voting mattered, it would be illegal', and while some of it bogus, like 'gun control', 'Democrats, the other, slightly more 'liberal' half of the 'Permanent War Party', etc....

Illusion of democracy: If US elections could change anything they wouldn't be held’, neil clark, RT today

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divineorder's picture

"been scant interest in the OP"

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A truth of the nuclear age/climate change: we can no longer have endless war and survive on this planet. Oh sh*t.

Alligator Ed's picture

@divineorder For instance:

The study’s authors estimated that almost half of the difference between US returns and foreign returns can be attributed to abnormally low tax rates for American multinationals, thanks to US power and tax havens. Tax privilege translates into about $180 billion per year, or almost one percent of US GDP, the research concluded.

This is very flawed accounting. Tax havens only take 1% of the GDP. How does the other 92% of GDP get from us (the "d" in gdp) to them who own everything?

As far as "woke" is concerned, my definition is utilitarian--it's knowing who's picking your pocket, even though there's still nothing you can do about it.

P.S., in consideration of "if voting were effective, it would be illegal, sort of like telling the truth in Congress.

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wendy davis's picture

@Alligator Ed

was meant to be divineorder's post; it just kinda turned out that way.

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wendy davis's picture

@Alligator Ed

looked at thee OP, barry grey's exposé and couldn't find the passage you'd written. well, duh, i'd finally opened the RT's cliffs notes, and there it is. my guess is that you're correct in your critique, although i'm a math idiot with numeraphobia by now. but my guess is that whoever wrote that piece wasn't quoting from the study. i did link to it, but hadn't clicked in.

dang, it must have been late in the swamp when you'd commented. ten degrees brrrrrr cold here this a.m., but the monsters dinnae get me in the night. or so i think, anyway. ; )

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wendy davis's picture

@divineorder

i should have noted "as per the comments", but then it was you who'd brought the not-very-relevant to the OP liz warren bill which many felt understandably obliged to deconstruct, followed by several caitlin johnstone links. there are exactly two things i've admired about her: her unwavering support for julian assange, and her essay about why it would be good for australia to repatriate assange. it was brilliantly constructed.

the post-robert parry joe lauria commentariat at consortium news likes her as well. my guess is that parry would not have featured her, but what do i know (past my own bias)?

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wendy davis's picture

tonight's lullaby just has to be from the incomparable carlos santana and his friends everlast:

i know there's monster livin' under my bed...dammit. callin' all angels...

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