From 1600 Pennsylvania Ave. March 26, 2009.
Shuster: The outrage over AIG's bonuses has been justifiable but the $165 million dollars pales in comparison to another abuse which has been going on for much longer and involves a whole lot more money. We're talking about offshore tax havens. Many of the same companies that have received tax payer bailout money have also done business in these so called tax havens for years.
And Joe what kind of money are we talking about with all of this?
Conason: Well David the last time this, anybody made a serious estimate of these numbers it came to something like $12 trillion sheltered in offshore tax havens world wide and an estimate of about $100 billion in lost revenues to the IRS. People avoiding taxes illegally in those same tax havens. And as you mentioned it's in fact all of the companies that have received tax payer bailouts, have some sort of tax haven subsidiaries, many of them with lot of them.
I mean you could imagine there's some reason to have I guess a branch in the Cayman Islands because people might want to do some banking there but why you would need ninety subsidiaries there is really an interesting question.
Considerably more than those bonuses indeed that have everyone's tail feathers in an uproar in the Congress. Joe Conason has more in his article at Salon AIG is chump change -- let's find corporate America's hidden billions. From the article.
But what reason other than evasion could there be for Goldman Sachs Group to set up three subsidiaries in Bermuda, five in Mauritius, and 15 in the Cayman Islands? Why did Countrywide Financial need two subsidiaries in Guernsey? Why did Wachovia need 18 subsidiaries in Bermuda, three in the British Virgin Islands, and 16 in the Caymans? Why did Lehman Brothers need 31 subsidiaries in the Caymans? What do Bank of America's 59 subsidiaries in the Caymans actually do? Why does Citigroup need 427 separate subsidiaries in tax havens, including 12 in the Channel Islands, 21 in Jersey, 91 in Luxembourg, 19 in Bermuda and 90 in the Caymans? What exactly is going on at Morgan Stanley's 19 subs in Jersey, 29 subs in Luxembourg, 14 subs in the Marshall Islands, and its amazing 158 subs in the Caymans? And speaking of AIG, why does it have 18 subs in tax-haven countries? (Don't expect to find out from Fox News Channel or the New York Post, because News Corp. has its own constellation of strange subsidiaries, including 33 in the Caymans alone.)
When the cost of these shenanigans was last estimated two years ago, the U.S. government's annual loss in revenue due to tax avoidance by major corporations and super-rich individuals was pegged at about $100 billion -- considerably more than a rounding error, even today. But of course that is only a rough assessment, as is the estimate of $12 trillion in untaxed assets hidden around the world. Nobody will know for certain until the books are opened and transparency is established.
So I assume that means it could be even higher. The Obama administration is looking into closing these loopholes but they've got a huge fight on their hands with this one. Conason is right though and these companies should not be allowed to be taking tax payer dollars and then potentially illegally avoiding paying their own taxes in the United States.