Investment Company Urges Americans To Stash Money In Belize, ‘One Of The World’s Top Tax Havens’

Tax havens are in many ways the liger of the financial world: everyone knows they exist, but few among us have ever seen one. They exist in a realm most of us remain blissfully unaware of, accessed only by the wealthiest in society.

However, fresh off their 15 minutes of fame during Mitt Romney’s presidential campaign, tax havens are now being promoted more openly as investment companies try to stoke rich people’s fears and encourage them to avoid paying U.S. taxes.

Exhibit A is an investment company named Buy Belize, whose website appeals to wealthy individuals who “lose sleep over the security of [their] assets & hard-earned money” using right-wing language terminology such as “death taxes,” which they incorrectly list at 55 percent (it’s actually 40 percent). The group encourages people to take their money out of the United States and store it in Belize instead, which they call “one of world’s top tax havens — a truly safe locale for your money.” Buy Belize also offers to set up shell companies — International Business Companies — to “protect investments from taxes as well as legal judgments.”

Buy Belize also advertises on The Glenn Beck Program, appealing to wealthy people who are “frustrated, nervous, and worried about change” to open offshore accounts in Belize, “one of the last tax havens left in the world.”

Listen to the radio ad:

Offshore accounts are a principal mechanism rich people and corporations use to avoid paying taxes in the United States. A study last year found that the super-wealthy around the world are shielding at least $21 trillion in secret offshore tax havens, and the problem has grown significantly in the past few years. And it isn’t just Mitt Romney who stores his wealth in foreign tax havens. In 2012, the 60 largest corporations in America offshored $166 billion, costing American taxpayers billions in lost revenue. As a result, this loss of tax revenue is draining federal and state budgets.

To learn more about offshore accounts, listen to NPR’s Planet Money as they demonstrate opening up a shell company “UnBelizeAble.”

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Awash In Record Profits, Corporations Shift Even More To Offshore Tax Havens

Even as American corporations are raking in record profits, the largest among them are shifting larger amounts of money away from the United States and into offshore tax havens that allow them to pad their bottom lines even more, according to multiple analyses of legal filings made since the beginning of 2013.

The Wall Street Journal found that the 60 largest companies moved $166 billion offshore in 2012, shielding 40 percent of their earnings from American taxes and costing the U.S. billions in lost revenue:

The amount of money at stake is significant, particularly when the U.S. budget deficit is high on the political agenda. Just 19 of the 60 companies in the Journal’s survey disclose the tax hit they could face if they brought the money back to their U.S. parent. Those companies say they might have to pay $98 billion in additional tax—more than the $85 billion in automatic-spending cuts triggered this month after the White House and Congress couldn’t agree on an alternative.

A similar analysis from Bloomberg found that 83 of the largest American companies moved $183 billion overseas in 2012, bringing the total offshore to $1.46 trillion for those 83 companies alone. Most of the companies, like Apple, Microsoft, and Yahoo, have set up subsidiaries in low-tax countries like Bermuda, Ireland, and the Cayman Islands specifically to receive tax benefits. That has ramifications for states, which lost $42 billion in revenue to corporate tax dodging in the last three years alone, and taxpayers and small businesses, who often have to pick up the tab.

And while the debate over corporate tax reform has flared again in Washington, the favorite reform of Republicans and corporate lobbying groups would only exacerbate the problem, making it easier for corporations to push even more money overseas at the expense of revenue and investment that could be made in the United States.

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How Yahoo Used Tax Havens To Cut Its Taxes By $42.8 Million

Tech companies are some of the most notorious tax dodgers, as their business is easily shifted from place to place and their revenues easily hidden in tax havens. Case in point, Yahoo has funneled hundreds of millions of dollars into low-tax countries, saving it tens of millions of dollars in taxes, as Bloomberg News reported:

Yahoo has taken advantage of the law to quietly funnel hundreds of millions of dollars in global profits to island subsidiaries, cutting its worldwide tax bill. [...]

Yahoo’s offshore operations cut its taxes by $42.8 million in 2011, U.S. securities filings show. Last February, the company reported a dispute with the U.S. Internal Revenue Service regarding its overseas arrangements. It didn’t disclose the amount at stake.

Kimberly Clausing, an economics professor at Reed College, estimates that “Profit shifting into tax havens by corporations costs the U.S. $90 billion a year.” That cost then gets shifted onto other businesses and individuals in the form of higher taxes or decreased government services.

Across the globe, corporate tax rates have plummeted in recent years, which one major bank admits “lend[s] and argument to those calling for hikes“:

The Wall Street Journal reported today that much of the money that U.S. corporations claim is offshore, and thus exempt from taxation, is actually right here in America. As the Wall Street Journal put it, this fact “undermines a central argument made by companies seeking tax relief to bring home money they have earned abroad.”

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