The revelation that the US presidential candidate paid no federal taxes for 18 years will come as no surprise to the global firms who funnel billions through taxation havens
It was one of the highlights of an unedifying US presidential race. The topic: Donald Trumps tax returns. Hammered by Hillary Clinton over the disclosure that hed paid no federal taxation, maybe for 18 years, Trump was unable to restrain himself.
There was no apology. That would have been out of character. Instead, the Republican nominee blurted out four terms: That induces me smart. For once Trump serial liar and alleged serial groper had unwittingly disclosed a great truth.
In the 21 st century the individuals who dutifully pay taxes are dupes. We are the losers in a modern game in which only smart people, as Trump indelicately set it, know the rules. In fact, the rich and powerful quietly exited from the business of paying taxation a long time ago.
The evidence is all around. A new analyze of Americas resulting Fortune 500 companies reveals that 367 of them some 73% have at least one or more subsidiaries in taxation havens. Some have hundreds. This allows them to legally ship gains offshore.
In Britain, meanwhile, it emerged that eBay paid just 1.1 m in taxation last year, despite telling US investors that the UK was its second largest marketplace, producing revenues of 1.1 bn. The cash originating in the UK flows to a parent company in Switzerland.
The mind-boggling scale of the problem is laid bare in a slew of volumes and reports that reveal the route in which multinational companies have excused themselves from paying vast amounts of tax.
The companies are a whos who of global brands: Apple, Nike, Google, Pepsi, Pfizer, Walmart, Goldman Sachs, and practically every other multinational in business.
The detail can be complicated, but the method is simple and legal. Companies set up subsidiaries in low or no-tax jurisdictions. These subsidiaries then charge the onshore parent for services or intellectual property or whatever, with the profits then funnelled legally offshore. US companies are merely obliged to pay tax when they bring the money back. Which they dont.
The study of Americas Fortune 500 companies shows that they collectively avoid an estimated $100 bn in federal taxes each year. The most popular taxation haven is the Netherlands. Bermuda and the Cayman Islands are not far behind.