New “Tax Evaders” Video Game Lets Taxpayers Blast Corporate Tax-Dodgers

                        ** PLAY HERE: www.taxevaders.net **

Bank of America, GE, Wells Fargo, Exxon-Mobil, BP, Chevron, Citi, Verizon, Microsoft, Facebook, Goldman Sachs and JP Morgan Blasted As Tax Evaders

American taxpayers nationwide will have the opportunity to blast some of our country’s biggest tax-dodgers in a new video game, “Tax Evaders.”  Inspired by the iconic “Space Invaders” video game, “Tax Evaders” will allow everyday taxpayers to blast tax-evading corporations like Bank of American, General Electric, Wells Fargo, Exxon-Mobil, BP, Chevron, Citi, Verizon, Microsoft, Facebook, Goldman Sachs and JP Morgan.

PLAY ‘TAX EVADERS’ HERE: www.taxevaders.net

“Why are we even discussing  cuts to social security and other public services before going after the Tax Evaders who are stealing hundreds of billions from our economy?” says Gan Golan, coordinator of the national project. “We don’t need to close schools and hospitals. We need to close tax loopholes for corporations and the very rich.”

In the last week, a number of studies released by Americans for Tax Fairness and US PIRG have shown that wealthy corporations have rigged the game in order to pay less than their fair share of taxes and these coordinated actions represent a growing backlash to the billions held in corporate tax havens and the tens of millions of dollars spent on lobbying by these companies to protect them.

In the game, the classic Space Invaders have become corporations trying to escape with society’s resources. The player is a crowd of citizens (activated by a Wii controller, or body motion) who blast the evaders and cause revenues to fall back to earth, revitalizing public services.

The game was designed in collaboration with famed game designer, Paolo Pedercini of Molleindustria to bring attention to the issue of corporate tax evasion and allow for the player to shoot Twitter-bombs at the corporations #taxevaders.

Studies Reveal That at Least $21 Trillion is Hidden in Secret Tax Havens, Gap Between Rich and Poor Growing

(The auther of this report, James Henry, will be on my radio show just after 5:40ET today. The streaming audio can be found here.)

Tax Justice Network
July 22, 2012

At least $21 trillion of unreported private financial wealth was owned by wealthy individuals via tax havens at the end of 2010. This sum is equivalent to the size of the United States and Japanese economies combined. The research comes amid growing concerns about the enormous gulf between rich and poor in countries around the globe.

There may be as much as $32 trillion of hidden financial assets held offshore by high net worth individuals (HNWIs), according to our report The Price of Offshore Revisited, which is thought to be the most detailed and rigorous study ever made of financial assets held in offshore financial centres and secrecy structures.

Read the full report here.

James S. Henry, TJN Senior Adviser and main researcher for The Price of Offshore Revisited, said: “This new report focuses our attention on a huge 'black hole' in the world economy that has never before been measured – private offshore wealth, and the vast amounts of untaxed income that it produces. This at a time when governments around the world are starved for resources, and we are more conscious than ever of the costs of economic inequality.”

Other Key Findings:

· At the end of 2010 the Top 50 private banks alone collectively managed more than $12.1 trillion in cross-border invested assets for private clients, including their trusts and foundations. This is up from $5.4 trillion in 2005, representing an average annual growth rate of more than 16%.

· The three private banks receiving the most assets offshore on behalf of the global super-rich are UBS, Credit Suisse and Goldman Sachs. The top ten banks commanded more than half the top fifty’s asset total – an increased share since 2005.

· Fewer than 10 million members of the global super-rich have amassed a $21 trillion offshore fortune is. Of these, less than 100,000 people worldwide own $9.8 trillion of wealth held offshore.

· If this unreported $21-32 trillion, conservatively estimated, earned a modest rate of return of just 3%, and that income was taxed at just 30%, this would have generated income tax revenues of between $190-280 bn – roughly twice the amount OECD countries spend on all overseas development assistance around the world. Inheritance, capital gains and other taxes would boost this figure considerably.

· For our focus subgroup of 139 mostly low-middle income countries, traditional data shows they had aggregate external debts of $4.1 tn at the end of 2010. But take their foreign reserves and unrecorded offshore private wealth into account, and the picture flips into reverse: they have aggregate net debts of minus US$10.1-13.1 tn. In other words, these countries are big net creditors, not debtors. Unfortunately, their assets are held by a small number of wealthy individuals, while their debts are shouldered by their ordinary people through their governments.

We consider these numbers to be conservative. This is only financial wealth and excludes a welter of real estate, yachts and other non-financial assets owned via offshore structures.

Nicole Tichon, director of Tax Justice Network USA, said, "Recent investigations into the world's largest banks have shown that financial secrecy is the means to bad ends. It protects criminals of all stripes. And the loss of tax revenues to both developed and developing countries has left widespread job loss, budget cuts and basic services in its wake."

Henry draws on data from the World Bank, the IMF, the United Nations, central banks, the Bank for International Settlements, and national treasuries, and triangulates his results against data reflecting demand for reserve currency and gold, and data on offshore private banking studies by consulting firms and others.

Accompanying this research is another study by TJN, entitled Inequality: You Don’t Know the Half of It, which demonstrates that all studies of economic inequality to date have failed to account properly for this missing wealth. It concludes that inequality is far worse than we think.

Read the full report here.

TJN interviewed eight of the world’s most respected economists specializing in economic inequality. They all confirmed a huge under-reporting problem in this area.

TJN’s research explains that if an asset is hidden in an offshore bank account, trust or company, and the ultimate owner or beneficiary of the income or capital therefore cannot be identified, then this asset and the income it produces cannot be counted in inequality statistics.

Nicholas Shaxson, author of the book Treasure Islands: Tax Havens and the Men Who Stole The World, said, "A pinstripe infrastructure of accountants, lawyers and financial institutions has painstakingly put together a global offshore system for hiding a large chunk of the world’s wealth and income from view. They have been spectacularly successful. Now that we can at last see the true scale of this monster, we will have to get used to the idea that inequality is much worse than we ever thought."

John Christensen, director of the Tax Justice Network, said, "Inequality has reached epic proportions. It threatens economic and social stability – but none of the big institutions such as the IMF, the World Bank, the Bank of England or the Fed, with their many thousands of highly paid economists – have ever taken useful and serious steps to measure all this offshore wealth. Without this, we could never understand the true, gargantuan scale of the inequality challenge we face. This is an astonishing abdication of responsibility on their part."

Although some inequality studies try to compensate for the missing offshore assets, all experts interviewed for this TJN paper, agreed that no study comes even close to compensating sufficiently.

The Tax Justice Network promotes transparency in international finance and opposes secrecy. We support a level playing field on tax and we oppose loopholes and distortions in tax and regulation, and the abuses that flow from them. We promote tax compliance and we oppose tax evasion, tax avoidance, and all the mechanisms that enable owners and controllers of wealth to escape their responsibilities to the societies on which they and their wealth depend.

Visit the TJN website here.

Visit the TJN-USA website here.

Read TJN-USA's latest blog on the impact of offshoring of revenues here.

You paid too much in federal taxes

Taxpayers just got screwed again by big, U.S.-based multinational companies. The overseas tax havens they use to avoid paying their fair share in taxes cost the average U.S. taxpayer $434 in 2010 according to a just released report. South Carolina tax payers each paid $204 additional federal taxes so that these multinational companies could pay little or no federal taxes.

I blogged about this issue last week but maybe you didn’t think the issue was that important. It is and we all need to demand that Congress stop offshore tax havens now.

Here is the executive summary of the report.  Read it and get angry.

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U.S. PIRG

April 18, 2011

Tax Shell Game: How Much Did OffShore Tax Havens Cost You In 2010?

EXECUTIVE SUMMARY

Tax havens are countries with minimal or no taxes, to which U.S.-based multinational firms or individuals transfer their earnings to avoid paying taxes in the United States. Users of tax havens benefit from access to America’s markets, workforce, infrastructure and security, but pay little or nothing for it—violating the basic fairness of the tax system.

Abuse of tax havens inflicts a price on other American taxpayers, who must pay higher taxes—now or in the future—to cover the government’s revenue shortfall, or must deal with cuts in government services.

The United States loses approximately $100 billion in tax revenues every year due to corporations and individuals sending their money to offshore tax havens.

• In 2010, making up for this lost revenue cost the average U.S. tax filer $434. That’s enough money to feed a family of four for three weeks.

• The taxpayers who pick up the largest share of the tab live in Delaware and New Jersey. On average, tax filers in those states paid an additional $920 and $752, respectively.

Some of America’s biggest companies—including many who have taken advantage of government bailouts or rely on government contracts—use tax havens. As of 2008, 83 of the 100 largest publicly traded U.S. corporations maintain revenues in offshore tax haven countries.

• Goldman Sachs, which reported more than $2 billion in profit in 2008, was able to use its 29 tax haven subsidiaries to reduce its federal tax bill to just $14 million. That means that Goldman Sachs’ CEO Lloyd Blankfein, who made $42.9 million that year, earned more than three times the amount that the company paid in federal taxes.

• General Electric appears to have paid no federal income taxes in 2010, despite reporting profits in the United States of $5.1 billion. The biggest company in the country, GE has lobbied hard for tax breaks and loopholes in the federal tax code, and shifted many of its profits to tax havens to avoid paying U.S. taxes. GE employs nearly 1,000 people in its tax department to help exploit those loopholes, but has laid off one-fifth of its U.S.-based workers since 2002.

To restore fairness to the tax system by preventing corporations and wealthy individuals from avoiding taxes through the use of tax havens, policymakers should:

• End the ability of U.S. multinational corporations to indefinitely defer paying U.S. tax on their profits. U.S. corporations should pay taxes immediately on profits from U.S. business that companies attribute to their foreign entities, rather than wait until they someday bring the money back to the United States. The United States should not adopt a “territorial” system under which companies temporarily move profits and pay taxes in tax haven countries and then freely bring them back tax-free to the United States.

• Expand rules against money laundering to cover those who aid and abet. The rules should include lawyers who set up shell companies, hedge fund managers who set up anonymous accounts, and others who help taxpayers avoid tax laws.

• Increase the penalties and strengthen rules related to offshore tax shelters, including prohibiting tax strategy patents and fees contingent on obtaining tax benefits.

• Revise tax treaties to enhance sharing of tax information between countries to include the real names of account owners.

• Require multinational corporations to report financial statements on a country-by-country basis.

• Close loopholes that allow tax credits from other countries to count against U.S. tax liability.

• End the ability of U.S. multinational companies to apply tax deductions related to foreign income to U.S. income.

• Eliminate the incentive for U.S. companies to transfer intellectual property (e.g. patents, trademarks) to tax haven countries for artificially low prices and then pay inflated royalties to use them in the United States. This manipulation masks what would otherwise be U.S. taxable income.

• Stop the ability of multinational companies to manipulate how they define their corporate status to minimize their taxes, including the ability to represent themselves as different types of corporations to different countries.

• Treat foreign corporations as U.S. domestic companies if they are managed and controlled in the United States.

• Increase IRS resources to combat transfer pricing and tax haven abuses

Talking tax haven abuse at the U.S. Capitol

About 15 Congressional staff and 15 others attended a briefing yesterday at the U.S. Capitol. They were there to learn more about how tax haven abuse by U.S. based multinational corporations is harming our country. The event was sponsored by the FACT (Financial Accountability and Corporate Transparency) coalition.
 

I was invited to speak to the Congressional staff about the negative impact on small businesses of the big corporations avoiding paying U.S. taxes. More importantly, those attending heard from Nick Shaxson, whose book Treasure Islands: Uncovering the Damage of Offshore Banking and Tax Havens was released this week in this country. The other more impressive speaker was Rebecca Wilkins, Senior Counsel on Federal Tax Policy at Citizens for Tax Justice, who spoke on remedies to the tax haven problem.

Chuck Collins (Institute for Policy Studies), Nick Shaxson
(author of "Treasure Islands", Rebecca Wilkins (Citizens for
     Tax Justice) and Frank Knapp at the front steps of the U.S. Capitol

For everyone else who wasn’t able to be at the briefing, below were my prepared remarks.

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You might be wondering why a guy representing small businesses in South Carolina is here in such a prestigious building and with such prestigious company.

South Carolinians have a long tradition of concern with being treated fairly. For those of you who know your Revolutionary War history, tax fairness was the issue. A large percentage of the battles were fought in the Palmetto state and it was in the swamps and fields of South Carolina that the war turned in the favor of the colonies.

One hundred and fifty years ago this week, South Carolinians ignited a Civil War because they didn’t think they were being treated fairly by the federal government.

Eleven years ago I and other founded the South Carolina Small Business Chamber of Commerce and one of the reasons was tax unfairness between big and small businesses.

In the past two weeks, my organization has been fighting another fairness issue. Amazon.com insists that they won’t build a distribution center in our state if it isn’t exempted from collecting sales tax on sales to customers in the state.

We oppose this exemption because it would create an unfair competitive advantage for Amazon over our brick-and-mortar and on-line retailers all across the state.

So here we are at tax season and again the issue is tax fairness.

The use of tax havens by U.S. based multinational corporations is clearly unfair to small businesses in South Carolina and across the country.

Multinationals avoiding paying U.S. taxes means that the small CPA firm of the Chairman Emeritus of our chamber competes with H&R Block that pays an effective tax rate of only 12.5 percent.

Multinational corporations avoiding paying U.S. taxes means that another founding board member who started a community bank has to compete against bank of America that paid no U.S. taxes in 2009 and 2010 as well as against Wells Fargo that paid less than zero U.S. taxes in those years because of a tax rebate.

Multinational corporations avoiding paying U.S. taxes means that one of our current board members, who is developing health care information software must compete against GE that, as we know, paid no U.S. taxes last year.

The small businesses that we want to create and are creating the jobs this economy needs should not be competitively disadvantaged to multinational corporations by our own tax law that are clearly unfair.

Beyond the competitive unfairness, small business should not be paying more in taxes for all the services we need from the federal government because multinational corporations are avoiding paying U.S. taxes.

Small business owners might not enjoy paying taxes, but they are very patriotic and are big supporters of fair competition.

Offshoring profits to tax havens is neither patriotic nor competitively fair. More and more small businesses are coming to realize this situation and are raising their voices to call for change.