A new report (PDF) from charity Oxfam says American companies stash a significant part of their cash overseas to take advantage of more favorable tax laws in other countries. They claim that tech companies take particular advantage of this practice, also known as “tax havens.” Oxfam which is crusading to get the U.S. government to crack down on this practice says tax havens costs the United States more than $100 billion a year in lost tax revenue.
The Business Insider brought us this Statista chart, based on the Oxfam report. Tech firms are hoarding nearly $500 Billion in cash overseas. The chart shows how much money major US tech companies have stashed overseas, and how many subsidiaries they have set up in countries that Oxfam defines as tax havens, “which can be characterized by secrecy, low- or zero-tax rates, and the almost complete lack of disclosure of any relevant business information.”
While tech is the most prominent sector on Oxfam’s list, the article claims tech is not alone — large companies in other sectors like General Electric ($119 billion), Pfizer ($74 billion), Merck ($60 billion), and Exxon Mobile ($51 billion) also have lots of cash stashed overseas.
There’s nothing illegal about this practice. But Oxfam believes it contributes to income inequality. They are urging U.S. lawmakers to make it harder for companies to use international tax laws to their advantage in this way.
Overseas tax havens have been the focus of recent revelations about tax scams by wealthy people, based on the leak of the “Panama Papers,” documents from a single Panama-based law firm, Mossack Fonseca, involving 214,000 offshore shell companies. The firm’s clients included 29 billionaires and 140 top politicians worldwide, among them a dozen heads of government.
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This list looks a lot like the one for the top lobbying spender firms. I wrote about the tech titans lobbying efforts just a couple of weeks ago here.
| Rank | Firm | Cash $ held off shore | Lobbying rank | Lobbying $ spending |
|---|---|---|---|---|
| 1 | Apple | 181.1B | 10 | 4.5M |
| 2 | Microsoft | 108.3B | 7 | 8.5M |
| 3 | IBM | 61.4B | 11 | 4.6M |
| 4 | Cisco | 52.7B | 14 | 2.7M |
| 5 | Alphabet/Google | 47.4B | 1 | 16.6M |
| 6 | HP | 42.9B | ||
| 7 | Oracle | 38.0B | 13 | 4.5M |
Related articles
- Obama urges Congress to take action on corporate tax reform (bnn.ca)
Ralph Bach has been in IT long enough to know better and has blogged from his Bach Seat about IT, careers, and anything else that catches his attention since 2005. You can follow him on LinkedIn, Facebook, and Twitter. Email the Bach Seat here.