According to the latest numbers from Citizens for Tax Justice and U.S PIRG Education Fund, U.S. companies save nearly $620 billion by storing profits overseas. The amount of cash sitting in these accounts could end the national deficit, if it were subject to taxes
CNBC reports that at least 350 large American companies maintain over 7,500 separate overseas subsidiaries, that hold $2.1 Trillion in profits, according to a report, Tuesday. The estimated tax numbers come from corporate filings.
Only 30 companies hold two-thirds of the profits held offshore. That amount, sits at around $1.4 Trillion dollars. The taxable amount of profits could be considerably larger. Only 57 of the companies reveal what their tax debt would be if the accounts were not kept offshore.
Apple holds the most in offshore accounts, with $180 billion in profits kept offshore. The company alone would provide $60 billion to the treasury in tax dollars. Drug maker Pfizer also ranked high on the list, with $74 billion in profits.
The report is a result of suggestions from the Organization for Economic Co-operation and Development. The group aims to overhaul global tax laws to better assess untaxed profits from corporations.
The current proposed ideas aim at the tax strategies that focus on tax strategies that shift money around the world, to avoid home country tax rates. Among those strategies, are those that move assets to countries with low rates. It also applies to booking sales in tax havens that do not physically occur there.
An investigation done by Reuters revealed that 74 percent of the 50 biggest technology groups in the United States engage in these practices to cut their tax bill.
Even though there are many who call for tax reform, changing the system would require an overhaul that is mixed in with special interests.
Changing laws globally would prove even more difficult, requiring changes to individual government tax laws, with some requiring completely new treaties between countries.