February 20, 2013
Johnston: Tax Havens Let Billions Vanish Into Thin Air
As you work on your state income tax return, give some thought to how much extra state income tax you must pay to make up for very wealthy California residents and multinational corporations who squirrel away money offshore.
The burden they shifted onto you came to $2.9 billion from wealthy individuals and $4.2 billion from big companies in the 2011-12 state budget year, a pioneering new study estimates [The Hidden Cost of Offshore Tax Havens: State Budgets Under Pressure From Tax Loophole Abuse]. Together the escaped tax comes to $7.15 billion that you have to make up through higher state taxes, fewer services or the state taking on more debt to fund current operations. ...
California, with 12% of the nation's population, sustained 18% of the losses because of its concentration of very wealthy people and multinational companies. Some of these companies, such as Google and Hewlett-Packard, are well known for their use of tax havens to avoid taxes.
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What's the point? If it is legal to keep it off shore and not taxed then why the weeping? If it is illegal it should be stopped. The whole point is your leaders in Washington and Sacromento allow it by not changing the law or possibly by not enforcing the law. The only people to blame are the voters....WAKE UP and vote the bastards out!!!!
Posted by: Sid | Feb 20, 2013 4:15:35 PM
The U.S. is the largest tax haven in the world, by far. We should stop crying until we repeal the Portfolio Interest exception and add capital assets to Sec. 871/881.
It's also goofy to talk of "losses sustained", as if the obliteration of Caymans, Bermuda would cause individuals to just cough up money instead of substituting other clever behavior.
Posted by: Yo Gabba Gabba | Feb 20, 2013 4:54:38 PM
The invitation to Sacramento readers to "give some thought to how much extra state income tax you must pay to make up for very wealthy California residents and multinational corporations who squirrel away money offshore" reveals a mindset that tax policy is a zero sum game in which the income/wealth pie is frozen at a certain immutable size, and the only real issue is who gets to wield the biggest political knife. Such thinking ignores the trade-offs between tax policy and national (or state) economic growth, a matter that any reasonably bright high school student should understand.
Posted by: Jake | Feb 20, 2013 9:56:41 PM