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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 Foundation 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
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.
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.
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.
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.
However, this analysis – U.S. PIRG Education Fund’s eighth evaluation of state transparency websites – finds that despite continued improvements in transparency websites, states still have a long way to go in making critical data about state spending truly accessible to the public. State governments should follow the example set by the nation’s “Leading States” in enabling their residents to “follow the money” on state spending.
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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