Report: Corporations have $1.2 trillion abroad

In its new report, PIRG says that corporations’ use of tax havens merely makes life harder for other businesses and taxpayers, who face higher taxes or deeper deficits. Subsidiaries in tax haven countries, the report adds, often have few employees and conduct very little actual business.

{mosads}“These companies benefit from America’s infrastructure, educated workforce, security, and access to the largest consumer market in the world,” Dan Smith, the report’s author, said in a statement. “They should not be able to use loopholes to get out of paying for it.”

The report also found that just one in five of the top companies publicly disclosed what they would likely pay to the Treasury if they didn’t keep profits abroad. Those 21 companies would owe some $93 billion in extra taxes, according to the report.

Under the current setup, U.S. multinationals owe taxes on profits they make anywhere in the world, but can defer paying until they bring the cash back home. Companies also receive credits for taxes paid to foreign governments.

Some top lawmakers have been critical of Apple, Google and other major U.S. corporations for their tax practices and use of tax havens. The Organization for Economic Cooperation and Development has also said that industrialized countries need to update their international tax rules.

Tim Cook, Apple’s chief executive, defended his company’s tax practices before a Senate panel this year, saying the company followed the rules and that the U.S. tax code was in dire need of a rewrite.

House Ways and Means Chairman Dave Camp (R-Mich.) has also suggested taxing corporate offshore income, as part of the transition to a system that would shield most foreign profits from U.S. taxation. Liberals say a so-called territorial system would give companies more encouragement to ship jobs and operations abroad.