Companies Stashing the Most Money Overseas

April 12, 2017 by Thomas C. Frohlich

The U.S. economic system encourages cost-cutting at every stage of business. While taxes are a yearly expense for small businesses, working families, and individuals, large U.S. companies avoid billions in taxes each year on cash held in offshore bank accounts.

The current level of global wealth inequality, which is widely expected to widen under reforms proposed by President Donald Trump and congressional leaders, is unprecedented. According to anti-poverty organization Oxfam America, just eight individuals possess more wealth than 3.6 billion people — half of humanity. The wealthiest 1% of people worldwide have more wealth than everyone else combined.

Against this backdrop, tax avoidance is especially troubling. The 50 largest public U.S. companies currently have a combined $1.6 trillion stashed in accounts and assets overseas — according to new analysis by Oxfam. Apple is the leader, with $200.1 billion held in foreign bank accounts.

Click here to see the 50 U.S. companies stashing $1.6 trillion overseas.

In an interview with 24/7 Wall St., Robbie Silverman, senior analyst at Oxfam, said, “We are not accusing any of these companies of doing anything illegal.” The problem, he explained, is that with their enormous lobbying efforts, the political influence wielded by these companies ensures large corporations can continue to take advantage of tax loopholes, while ordinary Americans and small businesses cannot.

The U.S. tax code is dazzlingly complex. One of the largest of many loopholes for large corporations lies in the rule that company earnings are taxed only after returning to the United States. Taking advantage of this rule, companies often opt to keep earnings overseas.

The U.S. corporate tax rate is 35%. Because of this loophole, however, and despite claims that this rate is too high and uncompetitive, few large U.S. companies actually pay this rate — with many paying much less. The average global effective tax rate across the 50 largest public companies is just over 25%, and only seven of these companies pay global effective tax rates 35% or greater.

Oxfam’s analysis is focused on lost tax revenue in what it names a rigged tax system. In addition to what might be accomplished with billions of added tax revenue — over $400 billion between 2009 and 2015 in the United States alone — there would be enormous benefits from an additional $1.6 trillion circulating in the U.S. economy.

The added tax revenue, for example, be used to help reduce inequality and fund public works such as bridges, roads, schools, and hospitals. This sum, which again represents the untaxed cash among just the top 50 public companies, is equal to more than 10% of U.S. GDP.

Given the sums accrued by holding cash offshore, companies have an interest in maintaining the current tax loopholes. As Silverman noted, “In many cases companies are fighting tooth and nail to preserve a specific tax loophole or other potential avenues to dodge taxes that small businesses and working families just don’t have access to.”

24/7 Wall St. reviewed total money held in offshore bank accounts by the 50 largest public U.S. companies provided by anti-poverty organization Oxfam America. To determine the amount of money stored in foreign bank accounts, Oxfam reviewed permanently reinvested earnings (PRE) from each of the 50 companies’ 2015 10-K financial reports. Estimates of each company’s profits, tax breaks, numbers of subsidiaries, total lobbying spending, tax-related lobbying spending, and global effective tax rates were also provided by Oxfam. Profits and lobbying expenditures are aggregates for the period of 2009-2015. To calculate the overall effective tax rate, Oxfam divided the total tax expense by total profits from 2009 to 2015 for each company. Five of the 50 companies — AT&T, Comcast, US Bancorp, and Walgreens — disclose that they own subsidiaries in tax havens but do not disclose the existence of cash held offshore.

 

 

Source: Wikimedia Commons

50. AT&T
> Money held offshore: Undisclosed
> 2009-2015 profits: $110.93 billion
> Global effective tax rate: 27.3%
> 2009-2015 lobbying expenditure: $114.32 million

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Source: Wikimedia Commons

49. Comcast
> Money held offshore: Undisclosed
> 2009-2015 profits: $64.52 billion
> Global effective tax rate: 36.5%
> 2009-2015 lobbying expenditure: $111.40 million

48. CVS
> Money held offshore: Undisclosed
> 2009-2015 profits: $47.38 billion
> Global effective tax rate: 38.9%
> 2009-2015 lobbying expenditure: $79.88 million

Source: Wikimedia Commons

47. US Bancorp
> Money held offshore: Undisclosed
> 2009-2015 profits: $45.23 billion
> Global effective tax rate: 25.7%
> 2009-2015 lobbying expenditure: $9.26 million

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Source: Wikimedia Commons

46. Walgreens Boots Alliance
> Money held offshore: Undisclosed
> 2009-2015 profits: $26.99 billion
> Global effective tax rate: 34.6%
> 2009-2015 lobbying expenditure: $15.97 million

Source: Courtesy of UnitedHealth Group

45. UnitedHealth Group
> Money held offshore: $459.00 million
> 2009-2015 profits: $58.47 billion
> Global effective tax rate: 38.1%
> 2009-2015 lobbying expenditure: $21.74 million

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Source: Thinkstock

44. Boeing
> Money held offshore: $700.00 million
> 2009-2015 profits: $38.07 billion
> Global effective tax rate: 27.1%
> 2009-2015 lobbying expenditure: $121.06 million

Source: Capital One Investing / Wikimedia Commons

43. Capital One Financial
> Money held offshore: $1.50 billion
> 2009-2015 profits: $34.47 billion
> Global effective tax rate: 31.0%
> 2009-2015 lobbying expenditure: $12.86 million

Source: Wikimedia Commons

42. Verizon Communications
> Money held offshore: $1.80 billion
> 2009-2015 profits: $72.64 billion
> Global effective tax rate: 31.6%
> 2009-2015 lobbying expenditure: $103.08 million

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Source: Wikimedia Commons

41. American International Group (AIG)
> Money held offshore: $1.80 billion
> 2009-2015 profits: $29.35 billion
> Global effective tax rate: -36.5%
> 2009-2015 lobbying expenditure: $4.08 million

Source: Wikimedia Commons

40. Wells Fargo
> Money held offshore: $2.00 billion
> 2009-2015 profits: $186.53 billion
> Global effective tax rate: 31.8%
> 2009-2015 lobbying expenditure: $42.00 million

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Source: allergan.com

39. Allergan
> Money held offshore: $2.09 billion
> 2009-2015 profits: $-6.86 billion
> Global effective tax rate: 0.0%
> 2009-2015 lobbying expenditure: $16.63 million

Source: Wikimedia Commons

38. Walt Disney
> Money held offshore: $2.70 billion
> 2009-2015 profits: $62.26 billion
> Global effective tax rate: 36.1%
> 2009-2015 lobbying expenditure: $27.85 million

Source: Wikimedia Commons

37. Phillips 66
> Money held offshore: $2.80 billion
> 2009-2015 profits: $32.47 billion
> Global effective tax rate: 32.4%
> 2009-2015 lobbying expenditure: $13.43 million

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Source: Wikimedia Commons

36. Prudential Financial
> Money held offshore: $3.22 billion
> 2009-2015 profits: $20.82 billion
> Global effective tax rate: 20.5%
> 2009-2015 lobbying expenditure: $57.20 million

Source: Ildar Sagdejev / Wikimedia Commons

35. Home Depot
> Money held offshore: $3.50 billion
> 2009-2015 profits: $52.01 billion
> Global effective tax rate: 36.3%
> 2009-2015 lobbying expenditure: $8.08 million

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Source: Wikimedia Commons

34. MetLife
> Money held offshore: $4.90 billion
> 2009-2015 profits: $30.26 billion
> Global effective tax rate: 24.1%
> 2009-2015 lobbying expenditure: $42.04 million

Source: Wikimedia Commons

33. Ford Motor
> Money held offshore: $5.50 billion
> 2009-2015 profits: $51.93 billion
> Global effective tax rate: -7.2%
> 2009-2015 lobbying expenditure: $40.93 million

Source: Courtesy of GMC

32. General Motors
> Money held offshore: $6.90 billion
> 2009-2015 profits: $109.38 billion
> Global effective tax rate: -32.9%
> 2009-2015 lobbying expenditure: $62.76 million

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Source: Wikimedia Commons

31. American Express
> Money held offshore: $9.90 billion
> 2009-2015 profits: $47.03 billion
> Global effective tax rate: 32.0%
> 2009-2015 lobbying expenditure: $16.67 million

Source: Wikimedia Commons

30. Morgan Stanley
> Money held offshore: $10.21 billion
> 2009-2015 profits: $27.40 billion
> Global effective tax rate: 17.2%
> 2009-2015 lobbying expenditure: $23.34 million

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Source: Wikimedia Commons

29. Berkshire Hathaway
> Money held offshore: $10.40 billion
> 2009-2015 profits: $157.59 billion
> Global effective tax rate: 30.5%
> 2009-2015 lobbying expenditure: $59.53 million

Source: Wikimedia Commons

28. Honeywell International
> Money held offshore: $16.60 billion
> 2009-2015 profits: $28.39 billion
> Global effective tax rate: 25.5%
> 2009-2015 lobbying expenditure: $44.24 million

Source: Wikimedia Commons

27. Bank of America
> Money held offshore: $18.00 billion
> 2009-2015 profits: $50.67 billion
> Global effective tax rate: 17.9%
> 2009-2015 lobbying expenditure: $22.10 million

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Source: Wikimedia Commons

26. Dow Chemical
> Money held offshore: $18.77 billion
> 2009-2015 profits: $30.34 billion
> Global effective tax rate: 24.1%
> 2009-2015 lobbying expenditure: $70.39 million

Source: Wikimedia Commons

25. Mondelēz International
> Money held offshore: $19.20 billion
> 2009-2015 profits: $21.02 billion
> Global effective tax rate: 11.8%
> 2009-2015 lobbying expenditure: $2.68 million

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Source: walmartcorporate / Flickr

24. Wal-Mart Stores
> Money held offshore: $26.10 billion
> 2009-2015 profits: $162.39 billion
> Global effective tax rate: 32.8%
> 2009-2015 lobbying expenditure: $48.16 million

Source: Wikimedia Commons

23. Intel
> Money held offshore: $26.90 billion
> 2009-2015 profits: $97.03 billion
> Global effective tax rate: 25.3%
> 2009-2015 lobbying expenditure: $32.21 million

Source: Wikimedia Commons

22. Gilead Sciences
> Money held offshore: $28.50 billion
> 2009-2015 profits: $55.52 billion
> Global effective tax rate: 20.4%
> 2009-2015 lobbying expenditure: $14.10 million

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Source: Creative Commons / Wikimedia Commons

21. Goldman Sachs Group
> Money held offshore: $28.55 billion
> 2009-2015 profits: $82.97 billion
> Global effective tax rate: 32.2%
> 2009-2015 lobbying expenditure: $26.10 million

Source: medtronic.com

19. Medtronic
> Money held offshore: $29.00 billion
> 2009-2015 profits: $27.53 billion
> Global effective tax rate: 19.0%
> 2009-2015 lobbying expenditure: $32.39 million

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Source: Wikimedia Commons

19. United Technologies
> Money held offshore: $29.00 billion
> 2009-2015 profits: $46.52 billion
> Global effective tax rate: 29.0%
> 2009-2015 lobbying expenditure: $96.46 million

Source: Wikimedia Commons

18. Coca-Cola
> Money held offshore: $31.90 billion
> 2009-2015 profits: $76.48 billion
> Global effective tax rate: 22.5%
> 2009-2015 lobbying expenditure: $50.31 million

Source: Wikimedia Commons

17. Amgen
> Money held offshore: $32.60 billion
> 2009-2015 profits: $38.51 billion
> Global effective tax rate: 10.6%
> 2009-2015 lobbying expenditure: $70.22 million

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Source: Wikimedia Commons

16. JPMorgan Chase
> Money held offshore: $34.60 billion
> 2009-2015 profits: $184.67 billion
> Global effective tax rate: 27.8%
> 2009-2015 lobbying expenditure: $44.59 million

Source: Wikimedia Commons

15. PepsiCo
> Money held offshore: $40.20 billion
> 2009-2015 profits: $58.29 billion
> Global effective tax rate: 25.2%
> 2009-2015 lobbying expenditure: $34.62 million

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Source: Wikimedia Commons

14. Oracle
> Money held offshore: $42.60 billion
> 2009-2015 profits: $84.49 billion
> Global effective tax rate: 22.6%
> 2009-2015 lobbying expenditure: $46.33 million

Source: Wikimedia Commons

13. Citigroup
> Money held offshore: $45.20 billion
> 2009-2015 profits: $86.01 billion
> Global effective tax rate: 23.1%
> 2009-2015 lobbying expenditure: $37.70 million

Source: Wikimedia Commons

12. Chevron
> Money held offshore: $45.40 billion
> 2009-2015 profits: $215.67 billion
> Global effective tax rate: 40.7%
> 2009-2015 lobbying expenditure: $79.02 million

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Source: Wikimedia Commons

11. Procter & Gamble
> Money held offshore: $49.00 billion
> 2009-2015 profits: $93.64 billion
> Global effective tax rate: 24.4%
> 2009-2015 lobbying expenditure: $32.14 million

Source: Wikimedia Commons

10. Exxon Mobil
> Money held offshore: $51.00 billion
> 2009-2015 profits: $363.40 billion
> Global effective tax rate: 40.3%
> 2009-2015 lobbying expenditure: $103.63 million

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Source: Wikimedia Commons

9. Johnson & Johnson
> Money held offshore: $58.00 billion
> 2009-2015 profits: $114.41 billion
> Global effective tax rate: 19.9%
> 2009-2015 lobbying expenditure: $42.94 million

Source: Wikimedia Commons

8. Cisco Systems
> Money held offshore: $58.00 billion
> 2009-2015 profits: $67.24 billion
> Global effective tax rate: 17.8%
> 2009-2015 lobbying expenditure: $16.88 million

Source: Wikimedia Commons

7. Alphabet (Google)
> Money held offshore: $58.30 billion
> 2009-2015 profits: $98.78 billion
> Global effective tax rate: 19.6%
> 2009-2015 lobbying expenditure: $86.38 million

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Source: Wikimedia Commons

6. Merck
> Money held offshore: $59.20 billion
> 2009-2015 profits: $60.61 billion
> Global effective tax rate: 22.5%
> 2009-2015 lobbying expenditure: $49.98 million

Source: Wikimedia Commons

5. IBM
> Money held offshore: $68.10 billion
> 2009-2015 profits: $137.58 billion
> Global effective tax rate: 22.2%
> 2009-2015 lobbying expenditure: $36.96 million

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Source: Wikimedia Commons

4. General Electric
> Money held offshore: $104.00 billion
> 2009-2015 profits: $84.83 billion
> Global effective tax rate: 19.6%
> 2009-2015 lobbying expenditure: $167.82 million

Source: microsoft.com

3. Microsoft
> Money held offshore: $124.00 billion
> 2009-2015 profits: $168.48 billion
> Global effective tax rate: 21.8%
> 2009-2015 lobbying expenditure: $56.36 million

Source: Wikimedia Commons

2. Pfizer
> Money held offshore: $193.59 billion
> 2009-2015 profits: $79.55 billion
> Global effective tax rate: 23.3%
> 2009-2015 lobbying expenditure: $89.41 million

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Source: Wikimedia Commons

1. Apple
> Money held offshore: $200.10 billion
> 2009-2015 profits: $296.73 billion
> Global effective tax rate: 25.9%
> 2009-2015 lobbying expenditure: $19.34 million