Geithner Vows Tax Haven Crackdown


We’ve known for a while now that 83 of the 100 biggest companies in the U.S. have subsidiaries in tax havens, a practice that lets those corporations skirt an estimated $100 billion in yearly tax liabilities.

On the list of 83 tax-dodgers, you’ll find the quasi-nationalized Citigroup (which takes the top prize, with 427 subsidiaries in tax shelters), AIG, Morgan Stanley, Bank of America…

You get the idea: We’ve thrown hundreds of billions of dollars at these institutions that actively search for ways to avoid paying their full tax bill. Treasury Secretary Tim Geithner addressed the problem Wednesday during his testimony before the Senate Finance Committee:

[I]t’s not fair to people who pay their taxes for people to continue to have the ability to evade U.S. taxes by taking advantage of offshore tax havens and a range of other provisions in current law which makes it—makes it possible to evade U.S. taxes.

That’s why in the budget there is a clear commitment by the president to come to the Congress with a comprehensive set of proposals for reducing international tax avoidance. As part of that,we’re going to have to bring a much more ambitious effort to deal with offshore tax havens.

That’s not going to be enough, though. There’s a range of other things that are—that are in the tax code now which create incentives to shift investment—jobs overseas, create other opportunities to evade U.S. taxes.

Aside from the irony of Geithner railing against tax delinquents, I think he’s correct in singling out one cause of the problem—a tax code that provides companies an incentive to shift jobs abroad. Geithner also said he would get back to the committee with a “set of proposals” to fight the tax haven problem. And in Congress, Rep. Lloyd Doggett (D-Tex.) and Sen. Carl Levin (D-Mich.) have introduced their own legislation earlier this week to deal with the problem.

DOES IT FEEL LIKE POLITICS IS AT A BREAKING POINT?

Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

We Recommend

Latest

Sign up for our newsletters

Subscribe and we'll send Mother Jones straight to your inbox.

Get our award-winning magazine

Save big on a full year of investigations, ideas, and insights.

Subscribe

Support our journalism

Help Mother Jones' reporters dig deep with a tax-deductible donation.

Donate

Share your feedback: We’re planning to launch a new version of the comments section. Help us test it.