We stand up for a Massachusetts where everyone gets a fair shot, does and pays their fair share, and plays by the same rules.
Where is Massachusetts going to get the money to improve the T, expand early education to every child or invest in job growth? Well we can start by looking at the Cayman Islands.
We hear the term “offshore tax haven” all the time, but what exactly does it mean besides exotic locales like the Cayman Islands or Bermuda? Corporations dodge taxes by booking profits made in America to tax havens like the Cayman Islands that levy little to no tax.
We at Massachusetts Fair Share believe it’s about time that rich corporations should start living by the same rules as the rest of us. It’s time to close these loopholes and invest in an economy that works for everyone. And the best part is, we don’t need to wait for Congress.
Oregon is about to enact a law to recoup money stashed in offshore tax havens this year and Montana has already done so, a move Montana’s former chief Director of Revenue, Dan Bucks, said brought “…a measure of tax justice to small businesses, farmers and ranchers, retirees and wage earners who already pay taxes on income they earn in Montana. Without the law, these Montanans would pay more to make up for taxes wrongly avoided by large corporations shifting their Montana income to tax havens.”
Massachusetts could gain so much by closing offshore tax loopholes at the state level. $79 million would be enough to:
Let’s look, for example, at Pfizer, the world’s largest drug maker. Pfizer, despite making 40 percent of its sales in the U.S. over the past five years, reported no taxable income in the U.S. during that time because it operates 172 subsidiaries in tax havens and has $73 billion parked offshore which remains untaxed by the U.S., according to its own SEC filing.
Oftentimes, corporations move taxes between more than one county. For example, Google, using two Irish subsidiaries and one in Bermuda, shrunk its tax bill by $3.1 billion from 2008 to 2010. According to a report by the MASSPIRG education fund, Massachusetts could save $79 million by simply treating countries that are known tax havens (Cayman Islands, Ireland, etc) with the same tax rules as the U.S. (You can download the report here).
Offshore tax-dodging is not a victimless offense. When it happens, it is the public who picks up the slack, and important programs like early education and transportation get stretched thin. Massachusetts should follow Oregon and Montana’s lead, and give everyone a fair share instead of favoring huge, multinational corporations.
Massachusetts Fair Share Media and Communications Intern Jay Epstein.