January 18, 2009

Practicing what you Preach - banking and off-shore havens

All the banks that received bail-out funds? Well guess what -- they are using off-shore tax-free havens to shield their funds from taxation. From the Washington Post:
Bailed-Out Firms Have Tax Havens, GAO Finds
Most of America's largest publicly traded corporations -- including several that are receiving billions of dollars from U.S. taxpayers to finance their recovery -- have set up offshore operations that could help them avoid paying U.S. taxes on their profits, a government study released yesterday found.

American International Group, Bank of America, Citigroup and Morgan Stanley are among the companies that are getting bailed out by U.S. taxpayers while having subsidiaries in locations where they can avoid paying U.S. taxes, according to the Government Accountability Office.

Of the 100 largest public companies, 83 do business in tax-haven hotspots like the Cayman Islands, Bermuda and the British Virgin Islands, where they can move their income into tax-free accounts.

It is all legal, but it could come to an end, given the dire condition of the U.S. economy and President-elect Barack Obama's campaign pledge to close this popular business tax loophole. The Treasury estimates that it loses $100 billion a year in tax revenue as a result of companies shipping their income off shore, and congressional leaders are vowing to introduce legislation forcing big companies to pay full freight.
And of course, the savings are passed through to the customers... No? This Nation needs a good thorough housecleaning. Dig out the corruption and graft. Posted by DaveH at January 18, 2009 8:14 PM | TrackBack