By Quentin Fottrell
Consumers pay an average of $434 a year to compensate for the estimated $100 billion lost overseas to tax havens, according to a new report by the U.S. Public Interest Research Group. “That’s enough money to feed a family of four for three weeks,” says the report.
While taxpayers from every state are picking up the tab, those living in Delaware and New Jersey shouldered the biggest state-wide averages of $920- and $752-a-year. “Abuse of tax havens inflicts a price on other American taxpayers, who must pay higher taxes now or in the future to cover the government’s revenue shortfall, or must deal with cuts in government services,” the report says.
How did PIRG come up with the $434? It divided $100 billion by the number of tax returns filed in 2010. Simple. And the big-bang smack-wallop figure of $100 billion? This comes from a 2008 U.S. report, Tax Haven Banks and U.S. Tax Compliance, which itself states, “This $100 billion estimate is derived from studies conducted by a variety of tax experts.”
The IRS could not be reached for comment.
Andrew S. Williams, a spokesman for GE, which has received a lot of attention lately and is mentioned in the PIRG report, says it’s fully tax compliant: “We expect to have a small federal income tax liability. In 2010, GE paid significant federal income taxes for prior years. We also paid about $1 billion in 2010 in other state, local and federal taxes in the U.S.” (Read more.)
Jamie Court, president of the non-profit Consumer Watchdog, and consumer advocate John M. Simpson, beg to differ. On Friday, they wrote to President Obama and chairmen of the House and Senate tax committees: “When most hard-working Americans focus on paying their share of income taxes, to ask that you ensure American corporations assume their fair share as well.”
Readers, do you believe corporate tax havens hurt your wallet? Read more of Quentin Fottrell’s consumer columns at Pay Dirt.