To paraphrase F. Scott Fitzgerald: The rich are different from you and me. They have offshore tax havens to stash their money.
Eighty-two of the top 100 publicly-traded companies in the United States, including 13 that are California-based, keep $1.17 trillion outside the country to avoid U.S. taxes, according to a new study (pdf) by the California Public Interest Research Group (CalPIRG) that amplifies other studies like this and this.
The 82 companies use 2,686 foreign subsidiaries to keep their revenues out of Uncle Sam’s reach, led by Bank of America with 316. General Electric keeps the most money in tax havens, $108 billion, followed by California’s own Apple, at $82.6 billion. The top 15 companies account for 66% of the $1.17 trillion offshore.
Only 21 of the 100 companies disclose, in voluntary tax reports, what they would pay in federal taxes if the offshore money moved onshore—$93 billion, about the size of California’s budget. The average tax rate paid by these 21 companies is 6.9%, compared to the U.S. tax rate of 35% that corporations whine incessantly about and dodge at every opportunity.
The CalPIRG report comes with an editor’s disclaimer: “For some companies, their actual number of tax haven subsidiaries may be substantially greater than what they disclose in the official documents used for this study.”
Although the money is technically outside the U.S., much of it is actually still in the country. More than half the money is held in U.S. banks or invested in American assets, but booked to foreign subsidiaries, according to a Senate investigation cited by CalPIRG.
The success at avoiding the U.S. tax collector has been so striking that, not unexpectedly, it has grown in popularity among multinational corporations. A five-year study published in May by Audit Analytics found a 70% increase in money held offshore by companies listed on the Russell 3000.
Lost tax revenues at the state and federal levels result in larger deficits, higher taxes for everyone else, underfunded government programs, unfair competitive advantages over small businesses and a general sense of unfairness among the electorate.
The following are the 13 California-based companies that made CalPIRG’s list of haven mavens:
| Amount | # of Tax Haven | Rank in | Offshore | |
| Company | in Havens | Subsidiaries | Revenues | Taxrate |
| Apple | $82.6 billion | 3 | 4 | 3.44% |
| Cisco Systems | $41.3 billion | 47 | 8 | NA |
| Hewlett-Packard | $33.4 billion | 22 | 2 | NA |
| $33.3 billion | 2 | 11 | NA | |
| Chevron | $26.5 billion | 17 | 1 | NA |
| Oracle | $20.9 billion | 5 | 13 | 0.07% |
| Intel | $17.5 billion | 11 | 6 | NA |
| McKesson | $3.8 billion | 1 | 3 | NA |
| Ingram Micro | $2.1 billion | 41 | 12 | NA |
| Wells Fargo | $1.3 billion | 77 | 5 | 6.77% |
| Safeway | $1.3 billion | 8 | 7 | 24.04% |
| Sysco Corporation | $910 million | 7 | 10 | NA |
| Walt Disney | $566 million | 9 | 9 | 8.50% |
–Ken Broder
To Learn More:
Big California Corporations Parking $262 Billion Offshore (by Dan Walters, Sacramento Bee)
82 of Top 100 Companies Used Tax Havens in 2012 Companies Hold $1.2 Trillion Offshore, Untaxed by U.S. (California Public Interest Research Group)
Offshore Shell Games (California Public Interest Research Group)
California-Based Apple Uses Irish Subsidiary to Dodge Billions in Taxes (by Ken Broder, AllGov California)