American companies on the Fortune 500 list hold more than $2.1 trillion in profits in offshore tax havens to avoid paying taxes in the U.S., according to a new report released Tuesday. If the money was repatriated, the companies would collectively owe an estimated $620 billion in taxes.
As of the end of 2014, "at least 358 companies, nearly 72 percent of the Fortune 500, operate subsidiaries" in 7,622 tax haven jurisdictions, according to the study, conducted by the left-leaning Citizens for Tax Justice and U.S. Public Interest Research Group Education Fund.
"The 286 Fortune 500 Companies that report offshore profits collectively hold $2.1 trillion offshore, with 30 companies accounting for 65 percent of the total."
About 60 percent of the companies have at least one tax haven subsidiary operating in Bermuda or the Cayman Islands, with other favored countries being Ireland, Luxembourg, the Netherlands and Switzerland, reports Reuters.
The worst offender was the technology firm Apple, which was holding $181.1 billion in three offshore safe haven subsidiaries, enabling it to avoid paying an estimated $59.2 billion in taxes in the U.S.
Multinational conglomerate General Electric had the next largest amount stored out of the country - $119 billion in 18 tax havens - followed by software firm Microsoft with $108.3 billion in five tax havens. Pfizer, the world's largest drug company, was holding $74 billion in 151 subsidiaries, according to the study.
Fifty-seven of the companies said they were currently paying about 6 percent in taxes overseas, compared to the 35 percent tax rate they would pay in the U.S., which would total an estimated $184.4 billion in taxes combined.
"Congress can and should take strong action to prevent corporations from using offshore tax havens, which in turn would restore basic fairness to the tax system, reduce the deficit and improve the functioning of markets," the study concluded. "There are clear policy solutions that lawmakers can enact to crack down on tax haven abuse. They should end the incentives for companies to shift profits offshore, close the most egregious offshore loopholes and increase transparency."
In April, Democratic presidential contender Sen. Bernie Sanders, I-Vt., introduced a bill to stop "profitable corporations from sheltering income overseas...to avoid paying U.S. taxes. The legislation also would end tax breaks for companies that ship jobs and factories overseas."
"At a time when we have a $18.2 trillion national debt and an unsustainable federal deficit; at a time when many of the largest corporations in America are paying no federal income taxes; and at a time when corporate profits are at an all-time high, it is past time for corporate America to pay their fair share in taxes so that we can create the millions of jobs this country needs," Sanders said.
