Written by Jubilee USA Network   

Corporate tax overhaul is an essential step to avoiding the fiscal cliff. Part of this overhaul would include closing offshore tax loopholes for corporations that would generate around $90 billion in revenue instead of hiding hundreds of billions of dollars offshore. These loopholes allow many of America’s largest corporations 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.

“Profits made in the US, need to stay in the US. Corporations’ use of offshore tax loopholes is immoral – it takes from needed revenue that should go to reducing global poverty, building roads and creating jobs at home,” 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 has been activating its faith communities to urge their Members of Congress to focus more on this solution by calling and 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 US, 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.

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[1] “Tax haven secrecy – keeping the poor poor,” Christian Aid, July 2011.

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Jubilee USA Network is an alliance of more than 75 US organizations, 250 faith communities and 50 Jubilee global partners. Jubilee USA Network has won critical global financial reforms and more than $130 billion in debt relief for the world’s poorest countries. www.jubileeusa.org