Apple ($181 billion), General Electric ($119 billion), Walmart ($23 billion) and Johnson & Johnson ($53 billion), are among the 50 largest US companies stashing money in offshore tax havens, the report states.
Though stashing money offshore is not necessarily illegal, the Oxfam report suggests it diverts approximately $111 billion in taxes from the U.S. government and an estimated $100 billion from poor countries. That means crucial investment needed in developing countries goes undone, perpetuating the growing divide between the world’s rich and poor, Oxfam says.
“Tax dodging practiced by corporations and enabled by federal policymakers contributes to dangerous inequality that is undermining our social fabric and hindering economic growth,” the report states.
WATCH: Trudeau: Canada is working with nations to stop tax evasion
The tax system is “rigged” and the powerful corporations are constantly working to further shape the system in their favour, the report claims.
And many of the corporations are collecting loans and bailouts from the government.
“Ironically, these same companies, which retain a multibillion dollar army of lobbyists to influence federal policy, are among the largest beneficiaries of taxpayer funded support.”
Taxes pay for roads, schools, and countless other public services to keep a country running. The more you make, the more taxes you pay — at least in theory.
The federal corporate tax rate in the U.S. sits at 35 per cent. According to Oxfam’s analysis, the 50 companies, collectively, are paying 26.5 per cent overall.
While the report focuses on U.S. corporations, the recent data leak known as the Panama Papers includes the names of at least 350 Canadians involved in offshore banking.
A recent poll found that 81 per cent of Canadians believe our country’s richest don’t pay their fair share of taxes, and 6 in 10 Canadians believe offshore tax havens are damaging the economy.
READ MORE: Panama Papers: Why should Canadians care?
It’s estimated that tax evasion by Canadians costs the country upwards of $6 billion every year in lost tax revenue.
The Oxfam report urges the U.S. government to take action to close so-called “loopholes.”
“Rather than engaging in a mutually destructive race to the bottom, the US should stake out a leadership role in addressing structural problems in the global tax system.”
It recommends Congress immediately pass the Stop Tax Haven Abuse Act introduced last year, along with the implementation of country-by-country reporting requirements for multinational companies.