How Legal Loopholes Allow Corporations to Avoid Taxes
Beginning in force in the mid 90s, U.S. multinationals have been avoiding corporate income taxes by shifting profits into shell companies in havens like Bermuda, the Switzerland and the Cayman Islands. At home, they have exerted tremendous lobbying pressure on Congress to get a second tax break to bring those profits back home. Bloomberg has chronicled the methods by which some of the world's largest corporations have legally used loopholes to avoid large tax bills.
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After Congress did away with a Puerto Rican tax break in 2006, U.S. companies shifted profits to subsidiaries in the Cayman Islands instead.
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Oct. 13, 2011 (Bloomberg) -- The U.S. Internal Revenue Service is auditing how Google Inc. (GOOG) avoided federal income taxes by shifting profit into offshore subsidiaries, according to a person with knowledge of the matter.
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Sept. 29, 2011 (Bloomberg) -- As a coalition led by Apple Inc. (AAPL), Google Inc. (GOOG), and Cisco Systems Inc. (CSCO) presses for a tax holiday on more than $1 trillion in offshore profits, it is turning to a well-positioned lobbyist: Jeffrey Forbes, once chief of staff to Max Baucus, chairman of the tax-writing Senate Finance Committee.
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June 28, 2011 (Bloomberg) -- Cisco Systems Inc. (CSCO) has cut its income taxes by $7 billion since 2005 by booking roughly half its worldwide profits at a subsidiary at the foot of the Swiss Alps that employs about 100 people.
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May 17, 2011 (Bloomberg) -- Google Ireland is not a branch office of the U.S.-based search giant Google Inc. (GOOG) It’s a separate corporation, and American tax collectors can’t touch a dime that Google Ireland earns from its core business until it sends profits back home to the mother ship in Mountain View, California.
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Bloomberg News reporter Jesse Drucker discusses how corporations have taken advantage of offshore tax havens to reduce their tax rates by hundreds of millions of dollars, on NPR's Fresh Air.
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Dec. 29, 2010 (Bloomberg) -- At the White House on Dec. 15, business executives asked President Obama for a tax holiday that would help them tap more than $1 trillion of offshore earnings, much of it sitting in island tax havens.
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Oct. 21, 2010 (Bloomberg) -- Google Inc. cut its taxes by $3.1 billion in the last three years using a technique that moves most of its foreign profits through Ireland and the Netherlands to Bermuda.
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July 23, 2010 (Bloomberg) -- A U.S. tech company identified only by the pseudonym “Delta” generated as much as 55 percent of its revenue domestically while reporting to shareholders that only 10 percent of its pretax income came from U.S. operations, according to a report presented to the House Ways and Means Committee.
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May 13, 2010 (Bloomberg) -- Tyler Hurst swiped his debit card at a Walgreens pharmacy in central Phoenix and kicked off an international odyssey of corporate tax avoidance.
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May 13, 2010 (Bloomberg) -- Over the past three years, Pfizer Inc. was an earner without profit in its own country. The maker of the cholesterol medication Lipitor, the world’s top-selling prescription drug, reported almost half its revenues in the U.S. for 2007 through 2009, while booking domestic pretax losses totaling $5.2 billion
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The Great Corporate Tax Dodge in the News
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March 17, 2011 (Bloomberg) -- On National Public Radio's "Fresh Air," Bloomberg News reporter Jesse Drucker explains how companies like Google, Pfizer, Lilly, Oracle, Facebook and Microsoft have managed to reduce their tax rates by taking advantage of offshore tax havens.
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Bloomberg investigative reporter Jesse Drucker talks with Guy Raz of NPR's All Things Considered about the effort of former congressional aides to help major corporations secure a massive tax break.
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Bloomberg reporter Jesse Drucker discusses what happen if Google paid the full tax rate on its profits, with NPR's All Things Considered host Guy Raz.
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