SI | STOP-Imperialism.com

The fifty biggest US companies have now around 1.6 trillion dollars stashed in offshore tax havens, according to a new Oxfam analysis. The revelations come as US President Donald Trump plans to slash US taxes for corporations and wealthy individuals as well as impose a new border tax.

Reporters discussed the issue with Robbie Silverman, a Senior Advisor for Oxfam America’s Private Sector Department.

Commenting on the biggest US companies holding billions of their profits offshore, the expert said:

“This is an absolutely eye-popping amount and that translates into a lot of tax revenues — hundreds billions of dollars — for not just America, it also represents a loss to developing countries around the world, when big companies are stashing their profit in offshore tax havens.”

According to the expert, there are now basically two sets of rules: one — for big businesses, and the other — for ordinary families and small businesses. This system is “very unfair” as “it means that a big business is able to dodge about hundreds of billions of dollars in tax,” Silverman argued.

Currently the top rate of US corporate tax amounts to 35 percent, which is one of the highest rates in the world. This has prompted many companies to hold billions of their profits offshore. Recently Google, Apple and other big multinationals have come under fire for routing their sales through countries offering low tax rates, such as Ireland.

President Trump, in turn, has pledged to reduce the corporate tax to 15 percent. While some have welcomed the move, saying it is a rather sensible way to bring profits back to the US, Oxfam warns it risks harming average consumers both in America and around the globe.

“We basically think that the proposal of President Trump would […] further incentivize the bad behavior, to further incentivize companies to keep more and more money offshore. We’d actually seen this before in the US, during the last tax holiday within 2004 [introduced by] President Bush,” Silverman said.

According to him, the rationale of this move was to create jobs, increase revenues and stimulate economic growth. But the initiative has failed to achieve these goals.

“The reverse actually happened. Basically, companies that brought the money back ended up flushing tens of thousands of jobs, the US treasury lost tens of billions of dollars in tax revenue and it further incentivized to keep more money offshore. That’s exactly why we now have such huge amounts that are offshore right now,” the expert noted.