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How to Avoid the “Fiscal Cliff” – Close Offshore Tax Loopholes

Thursday, 13 December 2012 12:08 By Jennifer Tong, Jubilee USA Network | Press release
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If corporations paid the $150 billion in taxes that they avoid per year through offshore tax loopholes it would more than cover the $109 billion in automatic spending cuts that are set to begin on January 1, 2013
Jubilee USA Network activates 250 faith communities and national network to protect the poor and hold corporations accountable
 
Washington, DC – One way to avoid the fiscal cliff is for corporations to pay their fair share of taxes – instead of hiding hundreds of billions of dollars offshore.  These loopholes allow many of America’s largest corporations and wealthiest individuals to avoid taxes by using accounting gimmicks to shift profits made in America to offshore tax havens, where they pay little to no taxes. At least 83 of the top 100 publicly traded corporations in the U.S. make use of tax havens, including Wal-Mart, Coca Cola and Pfizer. When these corporations skip out on their taxes, U.S. citizens are left to pick up the tab. Reclaiming the $150 billion lost to offshore tax loopholes would more than cover the $109 billion in automatic spending cuts that will take effect in 2013 if Congress fails to avert the fiscal cliff.
 
“No one needs to jump off the fiscal cliff of automatic spending cuts of $109 billion - if we support the option of closing offshore tax loopholes – that’s an easy $150 billion right there,” noted Eric LeCompte, Executive Director of Jubilee USA Network.  Jubilee USA has won more than $130 billion in debt relief for poor countries.
 
The current tax code with loopholes allows the wealthiest to avoid their tax burden at the expense of ordinary taxpayers. The billions of dollars invested in offshore tax havens should be invested to confront global poverty, to build our schools and help create jobs. Not only would this closure of loopholes benefit the U.S., but it would also benefit the world’s poorest and most vulnerable by sending a message that this type of corporate behavior is unacceptable. More than half of all banking assets and a third of multinational company investments are routed through tax havens. It is estimated that for every $10 a country receives in development aid, $15 exits the country as a result of tax dodging.[1] Corporations are operating in developing countries and robbing resources by using offshore tax havens to hide their money instead of paying their taxes – curbing this behavior at home sends a message that it should not be tolerated around the world. 
 
Jubilee USA Network is activating our faith communities to urge their Members of Congress to focus more on this solution by sending letters.  From this, faith communities around the nation are pushing for corporations to pay their fair share of taxes.
 
“By addressing this behavior in the USA, it sends a strong message that this kind of behavior worldwide is unacceptable. This is behavior that makes dodgy business practices the status quo and perpetuates the cycle of poverty around the globe,” said LeCompte.
 
[1] “Tax haven secrecy – keeping the poor poor,” Christian Aid, July 2011.

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