The UC Berkeley chapter of CalPIRG held a tax day press conference Tuesday and addressed a recent report’s findings that state taxpayers would pay about $400 more in 2011 taxes if the burden of tax loopholes used by corporations and individuals who stash earnings overseas was divided evenly.
“Many Americans would be shocked to hear about an invisible tax burden put on them this year by some of the largest, most profitable corporations that use offshore tax havens to avoid paying their full tax bill,” said Kate Uyeda, CalPIRG intern and campaign coordinator.
The 20-page report published Thursday states that tax haven abuse costs the United States around $100 billion in tax revenues annually, of which multinational corporations account for $60 billion.
“Assuming that the added $100 billion tax burden was distributed evenly among all American tax filers, in 2011 each tax filer would have to pay an average of $426 to compensate for the revenue lost to tax havens,” the report states.
Although college students are affected by the increased tax burden, the press conference extended its focus to the greater community impact — the tax burden, because of the loopholes, totals about $11.8 billion in California, the highest in the country.
“Responsible small businesses are put at a competitive disadvantage since they can’t hire armies of well-paid lawyers and accountants to use offshore tax loopholes,” Uyeda said. “The rest of us pick up this tab in the form of higher taxes, cuts to public programs or a larger federal debt.”
Several guest speakers also addressed the issue of corporate tax loopholes.
Berkeley City Councilmember Kriss Worthington formulated his take on the issue in the form of a poem, part of which read: “The power of corporate PACS / Exploit tax power to their max.”
UC Berkeley economics professor Brad DeLong also voiced his concern, saying the country is “on the wrong track.”
According to the report, if the tax burden were distributed evenly, California small businesses would pay more than $7 billion in additional 2011 taxes — about $2,010 per business.
Mel Vapour, owner of East Bay Media Center in Berkeley, spoke at the press conference and stressed the need to amend the tax code.
“We’ve seen our corporate property taxes double in the last 10 years,” Vapour said.
Uyeda said she is confident that holding tax evaders accountable would alleviate the national deficit, but according to UC Berkeley history professor and economics researcher Jan de Vries, enforcing tax laws is easier said than done.
While tax haven countries such as Switzerland and the Cayman Islands do benefit from American money, de Vries said that the countries’ laws and tax policies also pose a significant barrier.
“In order to get (corporations) to comply with American laws you have to confront sovereign governments and their laws,” de Vries said. “They’re not very sympathetic with our attempts.”
A photo petition created by the chapter displayed students posing with various signs with messages like, “I pay taxes, why doesn’t Exxon?” The petition will eventually be mailed to Rep. Barbara Lee, D-Oakland, said Uyeda.
CalPIRG is hoping for the passage of the Stop Tax Haven Abuse Act, a bill that has been introduced in the U.S. Congress and is co-sponsored by Lee. A similar bill called the CUT Loopholes Act has also been introduced, but both have yet to be voted on.
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Inflation is also an “invisible” tax burden, maybe CALPIRG should look into that
Boom.