A 2008 study done by the Government Accountability Office (GAO) reported that 83 of the top publicly held US companies have operations in tax havens like the Cayman Islands, Bermuda, and the Virgin Islands.
This means that these companies put billions of dollars in overseas banking organizations in order to avoid U.S. tax. Fourteen of these companies, including AIG, Bank of America, and Citigroup, received money from the government bailout.
According to the Department of Justice, Swiss banking giant UBS has enabled wealthy Americans to use tax schemes, some of which are illegal, to cheat the IRS out of billions of dollars.
The major international locations for hiding funds include Austria, Luxembourg, the Channel Islands, Singapore, Hong Kong, Andorra, Monaco, and Gibraltar.
n the Caribbean, the established havens are the Bahamas, Bermuda, and the Cayman Islands.
In December 2008, the bank holding company Goldman Sachs reported its first quarterly loss.
On the heels of this announcement, Goldman Sachs issued a statement confirming that its tax rate was dropping from 34.1% to 1%, reportedly due to “changes in the geographic earnings mix.”
This means that the company moved almost all of its money shares out of the U.S. in order to gain a better tax rate in a different country.
Goldman Sachs, which got $10 billion and debt guarantees from the US government in October 2008, expects to pay only $14 million in taxes worldwide for 2008, compared with $6 billion in 2007.
The problem is much larger than Goldman Sachs. The issue is being investigated and thousands of US taxpayers with Swiss bank accounts face the prospect of IRS examination of their bank documents. These individuals could face prosecution and/or civil litigation.
Sources:
Bloomberg, December 16, 2008
Title: “Goldman Sachs's Tax Rate Drops to 1% or $14 Million”
Author: Christine Harper
The Huffington Post, February 23, 2009
Title “Gimme Shelter: Tax Evasion and the Obama Administration”
Author: Thomas B. Edsall
