Corporate Tax Avoidance - The New Normal, Billions taken -Bye.

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Gabriel Zucman – a student of Thomas Piketty – analyzed data on U.S. international transactions from the Bureau of Economic Analysis to document just how extensive tax avoidance by U.S. companies has become.  He finds that U.S. multinationals attribute 55 percent of their foreign profits to six tax havens. Today, close to 20 percent of all U.S. corporate profits – domestic as well as foreign – are squirreled away in these countries, up from about 2 percent in 1984. This is a tenfold increase in the use of tax havens over the last three decades. The effective tax rate on U.S. multinationals has fallen dramatically as a result, saving them a total of $200 billion in 2013 alone in avoided tax payments to the governments of the U.S. and other countries. 

It’s unclear where this will end if Congress doesn’t act soon to close the loopholes that enable multinational corporations to avoid paying profits taxes in the U.S. Covidien was a U.S. company until it moved its headquarters to Ireland five years ago while maintaining most of its operations in Massachusetts.