Anti-poverty group warns Trump-Ryan corporate tax reform plans are a boon to billionaires and tax dodgers.
Bermuda, the Netherlands, Ireland, and Luxembourg are among the world’s worst corporate tax havens, and they will remain unimpeded by reforms proposed by President-elect Trump and Speaker Ryan, according to new Oxfam research published today. Oxfam warned that the radical tax reforms proposed by President-elect Donald Trump and House Speaker Paul Ryan are a blueprint for greater economic inequality around the world.
The report ‘Tax Battles,’ reveals how the top tax havens are starving poor and rich countries out of billions of dollars needed to tackle poverty and inequality. Oxfam has also combed through the tax proposals released by the Trump campaign and Speaker of the House Paul Ryan to assess their impact on economic inequality and corporate tax abuse.
“President-elect Trump has set high expectations for fighting inequality and fixing an American tax system that, by his own description, is rigged against the poor and middle class and controlled by special interests, but his plans are a love letter to big business and their lobbyists on K Street,” said Oxfam spokesperson Ben Grossman-Cohen. “In fact, if these plans become the law it will only further rig American tax laws in favor of wealthy special interests, intensify the global race to the bottom on corporate taxation, while doing nothing to prevent large corporations from shifting their profits into offshore tax havens.”
Oxfam researchers compiled the ‘world’s worst’ tax havens list for corporations by assessing the extent to which countries employ the most damaging tax policies, such as zero corporate tax rates, the provision of unfair and unproductive tax incentives, and a lack of cooperation with international processes against tax avoidance (including measures to increase financial transparency). The full list of the world’s worst tax havens, in order of significance are: (1) Bermuda (2) the Cayman Islands (3) the Netherlands (4) Switzerland (5) Singapore (6) Ireland (7) Luxembourg (8) Curaçao (9) Hong Kong (10) Cyprus (11) Bahamas (12) Jersey (13) Barbados, (14) Mauritius and (15) the British Virgin Islands.
Companies artificially shift profits into low or zero tax locations like Bermuda or the Cayman Islands, which is an enormous drain on the US Treasury and on the budgets of poor governments around the world. Oxfam’s ranking of the world’s 15 worst tax havens highlights how a dangerously unequal economic system leaves millions of people with few opportunities for a better life.
The US and developing countries each lose an estimated $100 billion per year because of corporate tax dodging. The 50 biggest US companies, including global brands such Pfizer, Goldman Sachs, Dow Chemical, Chevron, Walmart, IBM, and Procter & Gamble, use more than 1,600 subsidiaries in tax havens to avoid billions of dollars in tax each year, according to previously released Oxfam research.
“Tax havens are costing US taxpayers billions, but neither President-elect Trump nor House Speaker Ryan propose to lift a finger to constrain them, to stop companies from using them, or even to improve corporate transparency,” continued Grossman-Cohen. “Reigning in tax havens is an essential ingredient to unrigging the system, yet neither Trump nor Ryan has proposed to do so.”
Oxfam is calling for all governments, including the US, to work together to stop tax dodging and end the race to the bottom on corporate tax, including by stopping unfair and unproductive tax incentives and working together to ensure companies are taxed at a level that is fair, progressive and contributes to the collective good.
“Only wealthy shareholders win in the race to the bottom on corporate tax,” continued Grossman-Cohen. “Ordinary people in the US and around the world, especially the poorest, pay the price for this reckless competition. President-elect Trump should make good on his campaign promises to unrig the system.”