President Trump’s plans for a new one-off repatriation tax to encourage multinationals to bring offshore profits back to the US stands to give the 50 biggest US companies a windfall of between $312bn (£249bn) and $327bn (£260bn), according to research by Oxfam, reports CCH Daily.
The top 50 US multinationals, including global brands Pfizer, Goldman Sachs, General Electric, Chevron, Wal-Mart, and Apple, stashed $1.6 trillion offshore in 2015, which it says is $200bn more than the previous year.
The charity claims that much of the money is funnelled via a network of 1,751 subsidiaries in tax havens, while it claims to have identified an additional 143 tax haven subsidiaries the companies have put in place over the past 12 months.
Currently, capital that is repatriated from overseas subsidiaries is subject to the US corporate tax rate of 35%. During his election campaign, Trump indicated he was considering introducing a tax holiday or a one-off opportunity for US companies to bring offshore profits back, with the rate for doing so cut to 10%.
Trump has also suggested he may cut the US rate of corporation tax, which is currently one of the highest worldwide, with the rate potentially dropping as low as 15%.
In its report, Oxfam argues that the big US companies are boosting their investment in political lobbying in order to push for tax breaks. It says the top 50 companies spent $2.5bnn lobbying the US government between 2009 and 2015. An estimated $352m was spent lobbying on tax issues, which the charity claims helped to secure over $423bn in tax breaks.
Oxfam estimates that for every $1 these companies spent lobbying on tax, they received an estimated $1,200 in tax breaks. Five companies - General Electric, Verizon Communications, Comcast, AT&T and Exxon Mobil - account for approximately a quarter of all lobbying on tax by the top 50 companies.
Ana Arendar, Oxfam's head of inequality, said: ‘These companies have deepened their use of tax havens and increased efforts to build influence to push for even greater tax breaks than they already have.
‘Corporate tax dodgers cheat the US out of approximately $135bn in unpaid tax revenues every year and poor countries out of an estimated $100bn annually.’