Corporate Tax Cheats

Would you pay $720 for a jar of salad dressing? It's from Brazil, but still .... How about buying tweezers from Japan at $4,896 each?

These are not more of the infamous Pentagon purchases that occasionally make the news, but purchases that U.S.-based corporations routinely make from their own foreign subsidiaries. What we have here is a tax scam. It amounts to a massive money-laundering scheme in which corporations "buy" supplies and services from their overseas selves, grossly inflating the price they pay. These phony purchases move huge sums of corporate profits out of our country into the accounts of their foreign affiliates, thus escaping U.S. taxation on those profits.

Scamming Uncle Sam has become very big business, according to two highly-respected finance professors who've been tracking this annual rip off for a decade. Simon Pak and John Zdanowicz calculate that this "transfer pricing," as they term it, cost our public treasury $53 billion last year alone, and it's on the rise. Wow -- $53 billion would pay for a lot of health care, bridge and road repairs, alternative energy research, and other crying needs that the politicians keep telling us there's no money to finance!

Instead, this $53 billion was pocketed by the tax thieves. The transfers go two ways. In addition to buying from foreign subsidiaries, U.S. corporations also sell products to their overseas affiliates at ridiculously low prices, such as selling missile launchers to an Israeli subsidiary for $52 each.

This corporate fraud is another of the joys of globalization. Multinational firms play these global shell games to rip off We The People -- yet the treasury department doesn't even track their international tax-evading transactions.

Senator Byron Dorgan is on the warpath against these corporate cheats. To back his effort, call 202-224-2551.

#story_page_post_article

Understand the importance of honest news ?

So do we.

The past year has been the most arduous of our lives. The Covid-19 pandemic continues to be catastrophic not only to our health - mental and physical - but also to the stability of millions of people. For all of us independent news organizations, it’s no exception.

We’ve covered everything thrown at us this past year and will continue to do so with your support. We’ve always understood the importance of calling out corruption, regardless of political affiliation.

We need your support in this difficult time. Every reader contribution, no matter the amount, makes a difference in allowing our newsroom to bring you the stories that matter, at a time when being informed is more important than ever. Invest with us.

Make a one-time contribution to Alternet All Access, or click here to become a subscriber. Thank you.

Click to donate by check.

DonateDonate by credit card
Donate by Paypal
{{ post.roar_specific_data.api_data.analytics }}

Happy Holidays!