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WASHINGTON, May 5 – "In this world nothing can be said to be certain, except death and taxes." So wrote Benjamin Franklin.
If he were here today, Franklin might be surprised to see how some of the largest federal bailout recipients are coming dangerously close to disproving his adage. They are defying insolvency and avoiding taxes, at the same time and on the taxpayer’s dime.
On Monday, President Barack Obama announced his proposal to close corporate loopholes and reform our tax system so that it no longer rewards businesses which move their operations offshore.
On Tax Day (April 15), U.S. PIRG released Tax Shell Game, a report, a report that focuses on U.S. corporations who shift their profits to offshore tax havens to avoid taxes. We cited statistics from the General Accounting Office which documents how nearly 19,000 companies share one storefront in the Cayman Islands.
Tax Shell Game also notes that the top 100 publicly traded corporations utilize tax havens to house subsidiaries and lays out the burden put on taxpayers in each state by the $100 billion in tax revenues. These companies enjoy access to the U.S. marketplace, technology and workforce. As the world’s largest market, the United States government has unparalleled ability to set the rules and make sure the playing field is level.
Some of the biggest corporate tax dodgers are also the largest recipients of taxpayer bailout dollars, including Citigroup, Bank of America and Morgan Stanley. These same companies are now hiring lobbyists to convince Congress not to make them pay their fair share of taxes.
The idea behind TARP and other bailout programs was to help U.S. financial institutions get back on their feet and into business.
But there’s a difference between staving off the undertaker and enabling companies avoid paying their fair share of taxes.
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