1/ THREAD: The Biden administration is trying to tackle corporate profit shifting -- the way US multinationals avoid taxes by pushing their profits into offshore havens. I thought it would be useful to post some pieces that show how we got here:
2/ Back in 2003, Reed College economist @kclausing, (now high up in the Biden Treasury Dept.), examined international trade data and found much evidence of tax-motivated profit shifting offshore: sciencedirect.com/science/articl…
3/ Economist @M_SullivanTax dug through SEC filings for dozens of drug companies, Here he found Pfizer had not reported a dollar in US profit to investors for five years (but nearly $70 billion abroad) keeping its taxes low: taxhistory.org/www/features.n…
4/ In 2010, I discovered that Google avoided billions in taxes using the “Double Irish” and “Dutch Sandwich,” attributing profits to a Bermuda mailbox, and reporting a 2.4% tax rate abroad: bloomberg.com/news/articles/…
5/ In 2012, @tombergin_News found Starbucks had generated billions in revenue in the UK, but consistently told UK tax authorities that it never turned a profit and thus owed no income taxes: reuters.com/article/us-bri…
6/ In 2013, the @OECD announced a project aimed at offshore profit shifting. Until then, it had been a part of the problem, plagued by a revolving door with the law firms advising companies on these very practices: bloomberg.com/news/articles/…
7/ For years, Ireland was key to all of this. Here’s a piece on the Irish accountant behind the tax shelters used by Google, Linkedin, Facebook, and others: bloomberg.com/news/articles/…
8/ The Netherlands is also key, helping numerous companies dodge taxes, including Yahoo and Dell: bloomberg.com/news/articles/…
9/ In 2014, @ICIJ broke #LuxLeaks -- looking at how Luxembourg enabled companies like Pepsi and IKEA to avoid taxes around the world: icij.org/investigations…
10/ Here is a piece by @zachmider on inversions -- US companies claiming they are really based overseas -- possibly the most entertaining tax story ever written (edited by @DanLGolden) bloomberg.com/news/features/…
11/ In 2014, @gabriel_zucman discovered US companies booked 20% of their profits in a handful of tax havens: gabriel-zucman.eu/files/Zucman20… They now claim the majority of their overseas profits were earned in havens: papers.ssrn.com/sol3/papers.cf…
12/ The great @rbrooks45 of @privateeyenews has written so much in this area. Here’s his book: oneworld-publications.com/the-great-tax-…
13/ In 2017, @sbowers00 of @icij and I wrote about Apple’s latest tax avoidance arrangement, as disclosed in the Paradise Papers: nytimes.com/2017/11/06/wor…
14/ Before he passed away last year, tax law professor Ed Kleinbard of USC wrote several influential papers, and coined the term “stateless income.” Here is one: papers.ssrn.com/sol3/papers.cf…
15/ A few days ago, I wrote about Bristol Myers Squibb’s allegedly “abusive” offshore profit shifting arrangements: nytimes.com/2021/04/01/bus… Or listen: nytimes.com/2021/04/07/pod…
16/ If you have other stories or pieces of research that you think will help add to the understanding of this issue, please add them below.
17/ One important add: many big US companies have moved IP from offshore back into the US after the 2017 TCJA. Theoretically, this means that an offshore minimum tax will raise less than before 2017. So previous estimates, like @KClausing's $100 billion should be less.
18/ If anyone has seen research on this particular aspect, I'd be eager to read. cc @M_SullivanTax @stevertax

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More from @JesseDrucker

1 Apr
1/ EXCLUSIVE: Bristol Myers used an allegedly 'abusive' offshore shelter to dodge more than $1 billion in US taxes: nytimes.com/2021/04/01/bus…
2/ More than 15 years ago, the IRS attacked nearly identical offshore tax shelters used by GE, Merck and Dow Chemical. Here's a story I did for the WSJ: wsj.com/articles/SB115…
3/ A legendary tax lawyer who worked on the Merck shelter quoted Al Capone: "A good lawyer with a briefcase can steal more than ten men with machine guns."
Read 9 tweets
23 Dec 20
Buried in pandemic aid: $200 billion in tax cuts, largely for the richest. Latest by @lukebroadwater @rebeccaruiz and me: nytimes.com/2020/12/22/us/…
The CARES Act explicitly said that PPP loans were not taxable income -- but now Congress is letting recipients take tax deductions for spending those funds. This violates Tax 101 ...
Adam Looney, of @BrookingsInst, estimates this is a $200 billion tax break -- $120 billion of which will go to the richest 1 percent of Americans: brookings.edu/opinions/congr…
Read 5 tweets
30 Oct 20
A big reason for @realdonaldtrump’s low tax bills - a century of breaks for the real estate industry. Latest by me and @JamesStewartNYT: nytimes.com/2020/10/30/bus…
Trump has benefited from generous depreciation provisions in the tax code, which permits him and other real estate investors to get deductions for spending other people’s money, through massive borrowings.
Typically, if those borrowings stop getting repaid, the unpaid amount becomes taxable income immediately. But in 1993, Congress passed a law exempting real estate (although they did have to give up some future deductions).
Read 7 tweets
8 Jun 20
1/ The country’s biggest and wealthiest hospitals are getting billions in bailout funds – while they furlough their employees and hand out multi-million-dollar pay packages to their executives. Latest by @jbsgreenberg @davidenrich and me: nytimes.com/2020/06/08/bus…
2/ Some of the CEO’s have announced they are donating their pay to help out the furloughed employees. So we examined that.
3/ Ron Rittenmeyer is CEO of for-profit hospital giant Tenet Healthcare, which has received $345 million in taxpayer assistance since April.
Read 6 tweets
26 Mar 20
My latest: Stimulus bill features a potential tax boondoggle for real estate investors: nyti.ms/2QKweAn
The provision, added by Senate Republicans, removes a 2017 cap on investors' ability to use tax losses -- which for real estate investors often exist only on paper -- to offset taxes on other income.
One real estate investor who could benefit from this narrow provision: Jared Kushner. See this relevant story from 2018, by @flitteronfraud and me: nytimes.com/2018/10/13/bus…
Read 5 tweets
30 Dec 19
EXCLUSIVE: The 2017 tax law gave big multinational companies a windfall. But they wanted more - and got it, through a series of obscure regulations from the Trump Treasury Dept. My latest, w @jimtankersley: nytimes.com/2019/12/30/bus…
The new law handed out $5.5 trillion in tax cuts, including a massive corporate rate cut. This was partially offset by $4 trillion in new measures to raise taxes, including $262 billion from multinationals called the BEAT and GILTI.
Any new tax law requires regulations from the Treasury Department to figure out how to administer the new law. Treasury’s job here was particularly complicated because the law was so hastily and sloppily written. So tax lobbyists went to work.
Read 13 tweets

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