FOR IMMEDIATE RELEASE: March 15, 2013
Contacts: Greta Bergstrom, 651.336.6722, firstname.lastname@example.org
Anne Singer, Citizens for Tax Justice, 202.271.4679, email@example.com
TAKEACTION MINNESOTA RELEASES REPORT SHOWING MEDTRONIC, 3M, MOSAIC & ST. JUDE MEDICAL ARE HOLDING $31.6 BILLION IN OFFSHORE PROFITS WHILE LOBBYING TO PRESERVE INDUSTRY TAX LOOPHOLES
Revenue from closing state and federal tax loopholes could be used to avoid deep cut in services and jobs in Minnesota
St. Paul, MN– TakeAction Minnesota released a report today prepared by Citizens for Tax Justice in Washington, D.C., showing that four Minnesota corporations – Medtronic, 3M, Mosaic and St. Jude Medical– collectively had $31.6 billion in offshore profit holdings in 2012– an increase of nearly one-fourth (23%) from 2011 when the four companies had $25.6 billion in profits stashed offshore. These four companies are among 92 Fortune 500 companies that had nearly $1.4 trillion in profits parked offshore in 2012.
“We need to close these tax loopholes that allow companies to hide their profits in the Cayman Islands and other tax havens, so that we have the revenue needed to invest in Minnesota,” said Dan McGrath, Executive Director of statewide people’s network TakeAction Minnesota. “It’s a simple choice. Either we continue tax loopholes for big corporations, or invest in the future for seniors, kids and working families from vital service cuts.”
The four Minnesota companies and the foreign profits they are avoiding U.S. taxes on are:
|Corporation||Offshore Profit Holdings 2011 ($Millions)||Offshore Profit Holdings 2012 ($Millions)||Dollar Increase ($Millions)||% Increase||National Rank Among 92 Companies|
|St. Jude Medical||$2,200||$2,800||$600||27.3%||83|
For the full report visit: http://ctj.org/pdf/offshorechampions0313.pdf.
In recent years, U.S.-based multinational corporations have systematically accumulated staggering amounts of profits offshore. Much if not most of these profits were actually earned in the United States but have been artificially shifted to foreign tax havens to avoid U.S. corporate income taxes, according to the report.
Under current law, so-called “foreign” corporate profits are not subject to U.S. tax unless and until the profits are repatriated into the United States. According to the congressional JointCommittee on Taxation, this indefinite deferral of tax on profits ostensibly earned or shifted overseas will cost the federal government about $600 billion over the upcoming decade. There is legislation in Congress sponsored by Sen. Bernie Sanders (I-VT) that would end this practice.
Lobbyists for multinational corporations are urging both the U.S. Congress and the Minnesota State Legislature preserve industry loopholes. In Congress, they are trying to make the tax haven loophole even bigger in upcoming tax reform legislation, by permanently exempting from U.S. corporate income taxes all profits that U.S. corporations manage to have treated as “foreign.”
In Minnesota, industry groups representing 3M, Medtronic, and St. Jude Medical are lobbying to preserve preferences like the Foreign Royalty Subtraction, an industry tax loophole costing the state $185 million over the next two years.
It is expected that during the debate in Congress and at the Minnesota State Capitol this year there will be efforts to close corporate tax loopholes that encourage Minnesota companies to offshore profits generated here in America.
“We should end tax breaks for companies that ship profits and jobs overseas, and level the playing field for small businesses that create jobs in Minnesota,” added Dan McGrath, Executive Director, TakeAction Minnesota. “These successful companies should pay their fair share of taxes because if you do well in Minnesota, you should do right by Minnesota.”
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TakeAction Minnesota is a statewide people’s network of individual and organizational members working collaboratively to raise the voices of Minnesotans in their own communities to advance social, racial and economic justice.