Whoa, Nellie: talk about wars for oil extortion and profiteering! But actually, part of the grifting is among USian non-oil multinationals as well.
From Barry Grey, wsws.org, 10 November 2018
“US multinational corporations are plundering the populations of the United States and the world to the tune of trillions of dollars by driving down and evading taxes on profits booked overseas. This is the conclusion that emerges from a recent study by University of California at Berkeley economist Gabriel Zucman and British economist Thomas Wright.
Their paper, titled “The Exorbitant Tax Privilege,” points to the use of US military violence to drive down taxes on American oil multinationals by oil-producing states and a massive expansion of non-oil US firms booking their overseas profits in tax haven countries to generate huge tax savings and increased profits. The statistics the authors provide translate into $180 billion a year in tax savings on US multinationals’ overseas operations.
This is money diverted from government revenues in the US and around the world and funneled into the bank accounts and stock portfolios of the global financial oligarchy. In what amounts to an international extortion racket and swindling operation, the US government and both big business parties function as the enforcers of the American corporate elite.”
With an accompanying chart from the paper, Grey writes that US oil companies had been paying an on-average tax rate of 70% from 1996-1990, and that after the first gulf war in 1990-1991 the rate was reduced to 45% on average.
“They write: “The foreign tax rates of US oil multinationals fell significantly after the first Gulf War, during which the United States (and a number of other countries with significant investments in oil) intervened to protect Kuwait, a major oil producer.
“Although it is not possible to know for sure what caused this decline, a possible interpretation of the fall in the taxes collected by oil-producing countries… is that they reflect a return on military protection granted by the United States to oil-producing States.”
This is diplomatic language to suggest that the United States used its destruction of Iraq through military violence and deadly sanctions to extort foreign governments to lower their tax rates on American multinationals. To put it more bluntly, the super-profits obtained by ExxonMobil and other mega-monopolies are based in significant part on the blood and bones of millions of men, women and children killed and injured in Iraq, Libya and other Middle Eastern oil-producing countries, as well as tens of thousands of US soldiers.
Non-oil US multinationals have effected a dramatic reduction in taxes paid on overseas investments primarily by accelerating the shift of profit bookings to tax haven countries. Zucman and Wright report that American multinationals’ profits booked in offshore tax havens increased from 20 percent of total US overseas profits in the first half of the 1990s to 50 percent today.” (with an accompanying chart)
These havens include countries such as Ireland, Luxemburg, the Netherlands, Switzerland, Singapore, Bermuda and Caribbean tax havens.”
Apparently the sharp shift in off-shoring profits came in the 1990’s began with the removal of US Treasury tax restrictions under Bill Clinton in 1996, underscoring, as he writes, the bipartisan nature of the systematized transfer of wealth from the working class to the financial elite. The authors of the report note that while other nations without tax avoidance laws put their profits in tax haven nations, the US is Number One with 50%!
“The $1.5 trillion tax cut signed into law last December by President Trump, the benefits of which go overwhelmingly to corporations and the rich, provides additional windfalls for US multinationals that have parked trillions of dollars in profits in foreign tax havens to evade US taxes. Besides cutting the legal corporate tax rate from 35 percent to 21 percent (the real, or “effective,” rate is much lower), the law allows companies such as Apple and Google to repatriate their overseas profits at a discounted tax rate of 8 percent to 15 percent, depending on the nature of the assets.”
Grey writes that Boss Tweet’s law has already meant that between Jan. and June of 2018, corporate taxes dropped by $50 billion, a decline of one third over 2017. Then he writes that this destroys the cynical claim that corporations would use their tax savings to create jobs with decent pay, as the bucks are being used in stock buy-back schemes for paying increasing dividends to stockholders who purchase yachts, private islands…I’d add havens in New Zealand to weather…whichever next apocalypses come next.
He next claims that the $180 billion is six times the $30 billion needed to end world hunger, but I wouldn’t take that number…to the bank, so to speak.
‘Tax evasion helps US corporations steal $180bn from the rest of the world every year’ via RT, 9 Nov, 2018, has the Cliff Notes version, but oh, look: this morning’s headline is that the US Treasury Dept. has disconnected Iran from the SWIFT Messaging. RT adds:
“According to James Henry, investigative economist and senior advisor at Tax Justice Network, America’s wealthy kleptocrats, tax-dodgers, and particularly multinational companies have been massively parking money offshore. He told RT that by 2017 US multinationals have “accumulated about $2.6 trillion offshore while they didn’t have to pay the 35 percent US corporate tax.” [snip]
“The US’ accumulated foreign debt exceeds that of any other country, standing at about $8 trillion, or more than 40 percent of the US gross domestic product (GDP). That $8 trillion is the difference between $35 trillion in foreign investments in US assets and $27 trillion in US investments in foreign assets.”
I know that these numbers might pale in comparison to “We’ve Reached Never, Never Land” – Missing $21 Trillion – Part 1, gulfgal98 on Mon, 10/29/2018, caucus99percent.com, but still, a few hundred billion here, a few hundred billion there, sooner or later it adds up to a hella lot of extra profits for the tax swindlers.
In other financial weirdness news: Bank of England refuses to hand over Venezuela’s gold – report’, RT, 9 Nov, 2018
“British officials are insisting that measures aimed at preventing money-laundering are taken, The Times reports. The Venezuelan government is reportedly expected to provide a clarification about its plans for the gold.
“There are concerns that Mr. Maduro may seize the gold, which is owned by the state, and sell it for personal gain,” the media reports citing unnamed sources.”
This is the take on it from venezuelanalysis.com: ‘Venezuela Looks to Dodge Sanctions & Repatriate Gold from Bank of England’, Nov. 7, 2018
(cross-posted at caucus99percent.com)