Portal:Fix the Debt/Corporate Pirates
On June 13, 2013, the Institute for Policy Studies released a new report, Corporate Pirates of the Caribbean: Pro-Austerity CEOs Seek to Widen Tax Haven Loophole, which shows the billions of dollars Fix the Debt member corporations would stand to gain if Congress agrees to a "Grand Bargain" on the deficit that includes a “territorial” tax system exempting offshore earnings of U.S. firms from U.S. taxation.
The Fix the Debt campaign is a heavily funded corporate lobby group pushing for cuts to Social Security and Medicare and more corporate tax breaks. One of their main goals is a “territorial” tax system that would permanently exempt U.S. corporations’ foreign earnings from U.S. federal income taxes. Erskine Bowles and Alan Simpson, who serve as Fix the Debt Co-Founders, also made this reform a centerpiece of their recently released deficit reduction proposal. The IPS report provides updated figures based on recently released 2012 tax data. Major findings include:
- Two-thirds of the 93 publicly held corporations involved with Fix the Debt were holding profits in offshore subsidiaries at the end of 2012. The 59 firms that reported the amount of these offshore profits had a combined total of more than $544 billion, up from $473 billion in 2011. The average offshore stash per company rose 15 percent in 2012 to $9.4 billion. Currently, these profits are not subject to U.S. corporate income taxes unless they are brought back to the United States (also known as repatriation).
- If Congress adopts Fix the Debt’s proposed territorial tax system, these 59 companies would stand to win as much as $173 billion in immediate tax windfalls. The biggest potential winner is General Electric, which could reap a tax windfall of as much as $38 billion on its overseas earnings stash of $108 billion.