Adding insult to injury on the day American taxpayers are due to file their returns, a new report by the U.S. Public Interest Research Group states that many of the biggest U.S. companies who took advantage of government bailouts or rely on government contracts regularly hide their money from the IRS in overseas tax havens.
Overall, the U.S. loses approximately $100 billion in tax revenues every year as corporations and individuals shelter their fortunes in foreign bank accounts.
In 2009, President Barack Obama launched a major initiative against overseas tax havens with new tax laws, new reporting requirements and an army of 800 new IRS agents.
"I want to see our companies remain the most competitive in the world. But the way to make sure that happens is not to reward our companies for moving jobs off our shores or transferring profits to overseas tax havens," Mr. Obama said at the time, according to the Washington Post.
However, today's report by U.S. PIRG reveals that the president still has a long way to go.
Some of the report's key findings include:
- 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 that 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.
Click on the video player below to watch a recent "60 Minutes" report by Lesley Stahl on tax havens.