The average American would have to fork over an extra $1,259 in state and federal income taxes this year to make up for the revenue lost because of offshore tax havens used by corporations and wealthy individuals, according to a new report.
U.S. companies will use offshore tax havens to avoid paying an estimated $110 billion in taxes this year, according to the analysis by the U.S. Public Interest Research Group. Wealthy people will circumvent about $74 billion in taxes.
The report underscores the controversial issue of major companies using elaborate maneuvers to sidestep taxes, often by stowing income in overseas subsidiaries set up primarily for tax purposes. In some cases, critics say, enormously profitable companies pay no income taxes.
“Average taxpayers and small-business owners foot the bill for offshore tax dodging,” said Dan Smith, PIRG tax and budget advocate. “Every dollar in taxes companies avoid by booking profits to shell companies in tax havens must be balanced by cuts to public programs, higher taxes for the rest of us or more debt.”
The toll is especially heavy on small businesses, according to the report. The average small business would have to pay $3,923 to cover tax avoidance by its much larger brethren, according to the report.
Offshore tax havens give multinational corporations a big advantage over much smaller companies, which don’t have foreign-based subsidiaries that enable tax dodging, according to PIRG.
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