HOW THE BIG THREE U.S. TECH COMPANIES
ARE STASHING THEIR OVERSEAS POTS O'GOLD
You may wonder how the richest companies in the U.S. keep stuffing their pockets despite a rough
economy for the rest of us. For many of them, the secret is in a trick that sends profits overseas rather
than being taxed in the U.S., even though the companies are based here, helping them pay a
fraction of a percentage point on foreign profits through a scheme
nicknamed Double Irish.
WHAT THEY'RE (NOT) PAYING
EFFECTIVE RATES ON FOREIGN PROFITS VS. NATIONAL CORPORATE TAX RATES
0.1% Google 35% UK corporate
1.9 Apple 28%
DOUBLE IRISH DEFINED
THE BIG THREE HAVE STASHED BILLIONS THANKS TO THE LEGAL
TAX-AVOIDANCE SCHEME NICKNAMED DOUBLE IRISH.
A TAX-AVOIDANCE protocol officially known as transfer
pricing, Double Irish allows a U.S.-based company to avoid
paying income taxes here in the U.S. on profits earned overseas
by selling or licensing rights to patents or intellectual property
to foreign subsidiaries.
THE TECHNIQUE is employed mostly by huge corporations and
has allowed some companies (including Google, Facebook and
Apple) to cut billions off their tax bills.
HOW DOES IT WORK?
The scheme is called DOUBLE IRISH because it requires two Irish companies.
The first Irish company
is legally based offshore,
in the Cayman Islands
or Bahamas, for instance.
The fist Irish company licenses
BIG TECH the patent rights to a second
COMPANY Irish company, which is a tax
resident of Ireland.
LEGALLY BASED The second Irish company
FIRST IRISH receives income but its taxable
COMPANY profits are low because the
royalties or fees paid to the
first Irish company are
PUT TO A GOOD USE?
COLLECTIVELY, APPLE, FACEBOOK AND GOOGLE
HAVE SAVED ABOUT $8 BILLION IN RECENT YEARS
How might that money have been put to use here at home? As we're enduring massive federal budget cuts,
that money could...
...PAY FOR THE FEDERAL GOVERNMENT'S ENTIRE SHARE
OF THE CHIDREN'S HEALTH INSURANCE PROGRAM,
WHICH COVERS ABOUT
IMMUNIZATIONS 6.5 MILLION KIDS
THROUGH AGE 6 FOR
...FUND THE SALARIES OF NEARLY ...BUY A YEAR'S WORTH ...PAY FOR THE ENTIRE CALIFORNIA
200,000 770,416 4 YEARS
ELEMENTARY SCHOOL TEACHERS FAMILIES OF FOUR; THAT'S MORE
THAN THE POPULATION OF CHICAGO
=10,000 =20,000 =12 MONTHS
WHAT WOULD THAT MEAN
FOR YOUR FAMILY?
THE AVERAGE AMERICAN TAKES HOME ABOUT $37,000 AFTER TAXES, but what if we were all paying
our taxes like Apple does? Paying a 0.7% rate would save you about $3.575.
That's enough for a family of four to...
... FLY ROUND-TRIP ...PAY OFF A NEW, ... INCREASE WHAT ...SAVE UP A DOWN
TO YOU SPEND ON PAYMENT ON A
PARIS $25,000 CLOTHES BY $175,000
CAR IN ABOUT HOUSE IN ABOUT
THREE AND A FIVE YEARS
While you're busy working hard for your paycheck only to see a huge chunk
of it head straight to the tax man, billionaire corporations are
pocketing millions with a tax-avoidance strategy.
Do you think that's fair?
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