North Carolinians forced to pick up tab for deficit reduction
RALEIGH (April 4, 2013) — Tax dodging by corporations and wealthy individuals increase the federal budget deficit by almost $150 billion every year, according to a new report released today by the Public Interest Research Group (US PIRG). If the special loopholes, deductions, and breaks that allow this excessive level of tax dodging are not eliminated, the costs of reducing the federal deficit will be passed along to the rest of us — including North Carolina residents.
“All North Carolinians want to fix the federal debt, but the real question is who should pay," said Allan Freyer, Public Policy Analyst with the North Carolina Budget and Tax Center. "All of these special interest loopholes and deductions let multinational corporations and wealthy individuals get out of fulfilling their responsibility—and the cost for federal deficit reduction is passed along to rest of us, either in the form of spending cuts like sequestration or through middle class tax increases."
According to the new report, titled "Picking Up the Tab," corporations and wealthy individuals avoid paying an estimated $150 billion in taxes every year by using complicated accounting tricks to shift their profits to offshore tax havens.
As an illustration, if North Carolina’s residents were asked to pick up the state’s share of this $150 billion in order to reduce the deficit, they would see their taxes increase by as much $684 per year. Alternately, closing these loopholes and deductions for just this year would more than pay for replacing the $85.3 billion in sequestration cuts that began taking effect on March 1.
Many of America’s largest and best-known corporations use these complex tax avoidance schemes to shift their profits offshore and drastically shrink their tax bill, including Pfizer, the world’s largest drug maker, and an important employer in North Carolina. Pfizer made 40 percent of its sales in the U.S. over the past five years, but thanks to their use of offshore tax loopholes they reported no taxable income in the U.S. during that time. The company operates 172 subsidiaries in tax havens and has $73 billion parked offshore which remains untaxed by the U.S., according to its own SEC filing, the second highest amount of money sitting offshore for one U.S. multinational corporation.
The report also includes several important proposals for reducing tax dodging, including closing loopholes that allow tax-free offshoring of profits earned in the United States, and the rejection of a territorial tax system.
FOR MORE INFORMATION, CONTACT: Allan Freyer, firstname.lastname@example.org, 919.856.2151; Jeff Shaw, Director of Communications, email@example.com, 503.551.3615 (cell).