New Report on Shifting Taxable Income Out of the U.S. (4/16/14)

U.S. PIRG reports that it is "is a consumer group that stands up to powerful interests whenever they threaten our health and safety, our financial security, or our right to fully participate in our democratic society."  See web site about page here.  It has issued the following report: U.S. PIRG, Picking Up the Tab 2014: Average Citizens and Small Businesses Pay the Price for Offshore Tax Shelters (4/15/14), pdf download here and the download page with link is here.  The press release is here.

The principle focus of the report is for the shifting of otherwise taxable U.S. income overseas, particularly by large corporations.  While that is a phenomenon in the secret offshore bank area, the report is principally concerned with transfer pricing and other opportunities to shift, of the type recently investigated by the Senate Permanent Subcommittee on Investigations, which I previously report on.  See U.S. Senate Committee Investigation of Crackdown on Offshore Tax Evasion (Federal Tax Crimes Blog 2/20/14), here.

From the press release:

• General Electric paid a federal effective tax rate of negative 11.1 percent between 2008 and 2012 despite being profitable all of those years. The company received net tax payments from the government. GE maintains18 subsidiaries in tax haven in 2013 and parked $110 billion offshore. One of the company’s most lucrative loopholes just got renewed by the Senate Finance Committee. GE alone hired 48 lobbyists to push to renew the “active financing exception.”
• Microsoft avoided $4.5 billion in federal income taxes over a three year period by using sophisticated accounting tricks to artificially shift its income to tax-friendly Puerto Rico. Microsoft maintains five tax haven subsidiaries and keeps $76.4 billion, on which it would otherwise owe $24.4 billion in additional U.S. taxes.
• Pfizer paid no U.S. income taxes between 2010 and 2012 because the company reported losses in the U.S. during those years, despite making 40 percent of its sales in the U.S. and earning $43 billion worldwide. The company operates 128 subsidiaries in tax havens and has $69 billion parked offshore which remains untaxed by the U.S., according to its own SEC filing.