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TexPIRG: Use Of Offshore Tax Havens By Large Corporations Hurting Texas Small Businesses

A new study estimates the use of tax havens in places like the Cayman Islands costs the federal and state governments more than $100 billion a year.

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The Texas Public Interest Research Group (TexPIRG) has released its latest study measuring the extent of federal and state revenues lost due to the use of offshore tax havens. The study now puts such losses at $110 billion a year.

Multinational companies set up subsidiaries in places such as the Cayman Islands, then shift profits generated in the U.S. to those subsidiaries. “Technically, they’re a company based in the Cayman Islands,” says Sara Smith, state director for TexPIRG, “and their profits are from there — even though they’re able to benefit from U.S. markets, our infrastructure, our educated workforce, our security, and our rule of law.”

Smith says that small businesses, which rarely have such subsidiaries, wind up paying the cost of such lost revenue. “An average small business in Texas would need to pay an additional $3,104 [per year] to make up for the federal and state taxes lost due to offshore tax havens.” In practice, she says, small businesses and individuals make up the lost revenue through a mix of higher taxes, cuts to public services, and increases to the federal debt.

 

Report: Small Business Pay the Price for Offshore Tax Havens

 

Picking Up The Tab (PDF)

Picking Up The Tab (Text)

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media’s coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media’s business reporter, covering the oil...

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