“Where do multinationals pay taxes and how much?” Gaining insight from international tax experts, Backlight takes a look at tax havens, the people who live there and the routes along which tax is avoided globally. Those routes go by resounding names like ‘Cayman Special’, ‘Double Irish’, and ‘Dutch Sandwich’. A financial world operates in the shadows surrounded by a high level of secrecy. A place where sizeable capital streams travel the world at the speed of light and avoid paying tax. The Tax Free Tour is an economic thriller mapping the systemic risk for governments and citizens alike. Is this the price we have to pay for globalised capitalism? At the same time, the free online game “Taxodus” by Femke Herregraven is launched. In the game, the player can select the profile of a multinational and look for the global route to pay as little tax as possible. Originally broadcasted by VPRO in 2013.
Corporate Taxes: Last Week Tonight with John Oliver (HBO)
Transcript
00:04taxes essentially the government’s00:06GoFundMe page now00:08today is April 15th which means you have00:10just 45 minutes to file your taxes00:13except relax don’t panic because thanks00:15to the weekend and a holiday the00:17deadline is actually April 17th00:19this year except don’t relax do panic00:21that’s still not enough time to do it00:23right you’re fucked you’re absolutely00:25fucked and you’re going to jail Anthony00:28many people are perplexed and mystified00:31by our tax system perhaps best00:32exemplified by this Instagram video from00:34cardi B you know that government is00:37taking 40 percent of my taxes and Uncle00:41Sam I want to know what you’re doing00:43with my fucking tax money but why does00:44y’all niggas doing with my fucking money00:46what is your with my fucking money I00:49want to know I want receipts I wants00:51everything I wanna go to my cousin00:54weenie00:54[Applause]00:58whoa whoa cardi if you really want to01:01know where your money’s going may I01:02present to you the recently passed01:04omnibus spending package01:09[Applause]01:10because it turns out cardi your fucking01:13money goes to your fucking military your01:15fucking health care and your fucking01:17Social Security and veteran and01:19unemployment benefits everything else is01:21just on fucking discretionary shit and01:22of course interest now as you may recall01:26late last year Republicans passed and01:28Donald Trump signed a tax reform bill01:30and in selling it Trump made some clear01:31promises about who stood to benefit our01:34focus is on helping the folks who work01:38in the mail rooms and the machine shops01:39of America the plumbers the carpenters01:42the cops the teachers the truck drivers01:44the pipe fitters the people that like me01:47best well that that is clearly nonsense01:51because if this bill were really helping01:53the people that like Donald Trump best01:55it would exclusively benefit01:57Eric Trump Roseanne Barr and anyone01:59who’s ever looked both ways before02:00whispering it was the choose and the02:04truth is for all chumps talk of pipe02:07fitters the biggest tax rate cuts by far02:10actually goes to businesses with the top02:12federal corporate tax rate the tax on a02:14company’s profits going from thirty five02:16percent to just twenty one percent and02:19to be fair many policymakers on both02:21sides had argued at the 35 percent02:23federal rate among the highest in the02:25world02:25should actually come down but to be even02:27fairer most companies didn’t pay thirty02:30five percent in fact before the bill was02:32signed to the effective rate the amount02:33companies actually paid was closer to02:36twenty four percent and some large02:37companies have historically paid far02:39less than that02:40you may remember a few years ago people02:42were furious about this ge had profits02:45of fourteen point two billion dollars in02:472010 five billion dollars of that made02:50in the United States but the company’s02:52expected US tax bill a grand total of02:56zero dollars okay so when the total is03:00zero you can’t call it a grand total03:02there is literally no total less grand03:05except maybe total cereal and that’s03:09just because it tastes like your spoon03:10somehow missed the cereal and now you’re03:12just eating the box that it came in03:14and GE may well say we’ll hold on that’s03:17just one year but a recent study found03:20that between 2008 and 2015 18 large03:23profitable companies including General03:26Electric paid no federal income tax at03:28all over the entire period not at all03:31and that is a staggering total which is03:34incidentally what they used to call03:35total with raisins until they got more03:37honest who changed it to total with03:39raises but who gives a shit03:41so tonight in honor of upcoming tax day03:44we thought we’d give you just a glimpse03:46of the lengths that companies will go to03:48to legally avoid taxes both here and03:50abroad03:51now corporate tax avoidance has a long03:53and infuriatingly proud history in the03:561980s for instance a lawyer named John03:58Carroll jr. came up with a tactic to04:00move US companies offshore to avoid04:02taxes and his firm celebrated him with04:05and this is true a 13-minute operator04:07staged in his New York apartment and04:10I’ll give you just a very small taste04:12[Music]04:21Wow04:22we may have just found the only musical04:26resistant to race blind casting you04:28can’t go Hamilton on this one because04:31those people really have to be white now04:34now that the tax dodge being celebrated04:37they’re involved taking an American04:39company and headquarter in it in Panama04:41where taxes were lower something its04:42creator called the Panama scoot which04:45sounds like the name of a tiny elf in a04:47cowboy hat04:49my name’s Panama scoot and I sleep in04:51your boots and offshore scooting is04:55actually something of a common theme in04:57corporate tax avoidance for decades04:59companies have hunted for ways to get05:01their money to friendlier tax havens05:02like the Cayman Islands you may remember05:04that during the 2012 election it emerged05:06that Mitt Romney had money in the in05:08companies in the Caymans which led to05:10this magnificent clip of John Stossel05:12saying the one thing he probably05:14shouldn’t be saying to the person he’s05:15speaking to but Romney pays taxes and05:19all the money earned from the cayman05:22entities i would think it would be like05:24pirate heaven some pirates can’t say the05:34word pirates05:35to a guy with an eyepatch it can’t it’s05:38not fair05:39it’s like me sitting down across from05:41you and calling you bootleg Geraldo yes05:43yes it’s obvious but it’s also lazy and05:46hurtful that’s an indoor thought and tax05:50havens have become magnets to05:52corporations who try and shift as much05:54of their profits there as possible it’s05:56a major reason why in 201605:58nearly two-thirds of the profits made by06:01American multinationals outside the US06:02were booked in just six low or zero tax06:05countries and it’s a lot easier to move06:08profits offshore than you might think an06:10increasingly popular way particularly06:12pharmaceutical and high-tech companies06:15like Google avoid paying the 35% is to06:18shift their patents computer code pill06:21formulas even logos from their US bases06:24to their outposts in low tax countries06:27today06:27a company can move automatically all of06:31its assets just on paper you can push a06:34button and move your algorithms you know06:37could take the recipe out of the vault06:39yeah put it in a Swiss Fault and then06:41and then it’s Swiss yep coke could put06:46that recipe in a Swiss vault and their06:48profits would move offshore that is very06:50roughly how it works although for the06:51record just being in a Swiss vault06:53doesn’t automatically make something06:55Swiss that’s why we don’t call this06:57Swiss gold we call it Nazi gold07:00those are Hitler bucks your Swiss fucks07:02and this this happens all the time07:05and the best innovators in weasely07:08accounting have arguably been tech07:09companies look at Apple for years07:11they’ve been deferring paying US taxes07:13on foreign profits by stashing the money07:15overseas and not bringing it back so07:17much so that at the end of last year07:19they had 269 billion dollars parked07:22overseas and when their CEO Tim Cook07:24appeared in front of Congress a few07:25years back he was very defensive about07:28that07:28we pay all the taxes we owe every single07:33dollar we don’t move intellectual07:35property offshore and use it to sell our07:38products back to the United States to07:40avoid taxes we don’t stash money on some07:44Caribbean island now he was technically07:47correct there because Apple didn’t stash07:49their money on a Caribbean island they07:52did however have it stashed on this07:54island Ireland which is it is true not07:58in the Caribbean so one word made a lot08:01of difference there it’s like if08:02somebody said the one thing I can08:04promise you is that this refrigerator is08:05absolutely not08:06full of severed Caribbean heads maybe08:10that is technically true but I’m still08:11going to pass on a sparkling water and08:13when Ireland indicated that it planned08:15to change its tax laws Apple found a new08:18shelter for profits on this island the08:20Isle of Jersey a tax haven in the08:22English Channel which is again not08:24technically in the Caribbean although08:26when you really look at it you could08:28almost mistake it for the Caribbean if08:30you squint a little drink 9 points of08:32beer and hold a picture of the Caribbean08:34in front of us08:35meanwhile Google used a slightly08:38different tax workaround sending its08:39money on something of a world tour08:41Google license some of the intellectual08:44property it created here in the US to a08:46subsidiary in Ireland but it turns out08:49Google’s overseas profits don’t even get08:51taxed there because Google then08:53reportedly funnels those profits through08:55the Netherlands and then to of all08:57places Bermuda where the corporate tax09:00rate is zero now that tax trick actually09:04has a name it’s called the double Irish09:06with a dutch sandwich it sounds like a09:09disgusting sex act or an even more09:12disgusting Waffle House menu item it’s09:15it’s when someone opens up a baked09:17potato farce in it and closes it again09:19really quick that’s one of it that09:22that’s that is exactly what it is and09:24when Google CFO was asked about their09:27tax policies at a conference his answer09:29nearly got him laughed off the stage we09:31pay our taxes in every jurisdiction to09:34the full extent that the law allows us09:36and that’s what we do we pay every penny09:39of tax we owe to everybody everywhere ok09:43the reaction to the sentence I pay allmy taxes should never be incredulouslaughter unless you are a very wealthy09:50dog who’s just spoken for the first time09:52and here is where I have some good news09:55and some bad news the good news is that09:57Trump’s tax bill actually forces09:59companies to pay taxes on all the money10:01they’ve stashed overseas the hope is10:03that they’ll then bring it home in10:04something called repatriation the bad10:06news is the tax they’re being forced to10:08pay which may have once been 35%10:10remember has been slashed to as little10:12as eight to 15% which seems less like a10:16punishment and a lot more like actively10:18rewarding companies for tax avoidance10:20but Steve minuchin10:22Treasury secretary an objectively10:23good-looking man argues that this would10:26be a huge benefit to America’s workers10:29we will have a one-time tax on overseas10:33profits which will bring back trillions10:36of dollars that are offshore to be10:38invested here in the United States to10:42purchase capital and to create jobs now10:45I know it was hard to pay attention to10:46what he was saying because you were just10:47automatically undressing10:49to go with your eyes and you do it10:51whenever he opens his mouth I’m all10:52right I’m definitely right the guy’s a10:55California ten10:56he’s a smoke show but but what he’s10:58saying there is giving these companies a11:01break on the taxes they owe is worth it11:03because it will lead to job creation and11:05that is hard to completely disprove11:07because anything theoretically could11:10lead to jobs you can say I’m dipping11:12this badger in fudge to create jobs and11:14I can’t prove that you won’t create any11:17jobs by doing that but I would argue11:19that if creating jobs is your main goal11:21there are probably better ways to do it11:23now luckily we actually have the benefit11:25of a test case here because in 2004 we11:27basically did the exact same thing under11:29the American Jobs Creation Act it11:31offered a one-year tax holiday where11:34companies could bring back overseas11:35profits and just a five percent tax11:38rates the idea was that they would then11:39create jobs but when the Senate looked11:43at the employment numbers of the 1511:44companies that brought back the most11:45money this is what they found11:47these are the average numbers of US jobs11:50at those companies over a five year span11:52here is where the big supposedly11:55job-creating tax holiday kicked in and11:57that is pretty fucking underwhelming I11:59would argue that’s the most useless12:01ineffective holiday since Arbor Day and12:03I’m sorry Arbor Day but your secretaries12:06day for trees and we all need to accept12:07that in fact instead of hiring workers12:10across the board companies mostly12:13rewarded their shareholders using 9412:16cents out of every dollar they brought12:18home on stock buybacks and dividends12:20something you can read about in the12:21best-selling book yeah no fucking shit12:23they did that by acclaimed author12:25everyone who knows anything about12:27corporations and look for many of those12:30companies that may have been the best12:32use of their money there is no point in12:33hiring people that you don’t need12:35but the Trump administration is fiercely12:37insisting that this time their tax12:39holiday is already creating jobs and12:42some companies have seemed happy to pay12:43along play-along Apple put out a press12:46release not long after the tax bill was12:47signed titled Apple accelerates US12:50investment and job creation bragging12:52they were about to create over 20,00012:54new jobs and Trump was quick to take12:56credit President Trump tweeting in12:58response quote I promised that my13:00policies would allow companies like13:01Apple to bring mass13:02of amounts of money back to the United13:04States great to see Apple follow through13:05as a result of tax cuts all caps okay13:10first that is a solid read from Jake13:12Tapper there in fact I think all anchors13:15should be forced to shout whenever Trump13:17uses all caps in tweets I’ll show you13:19this morning the president announced13:22that he was quote heading to see the13:24border wall prototypes in California or13:28today today the president wished all13:32Americans are happy Easter but but for13:37all the Trump’s excitement those 20,00013:39Apple jobs were probably going to happen13:41anyway given that the hole was entirely13:43consistent with what Apple was doing in13:45the United States before the tax cut13:47bill passed and Tim Cook knows this this13:49is how he responded when asked just how13:51much of his hiring spree was down to13:54Trump’s new tax plan there are large13:56parts of this that a result of the tax13:58reform and there’s large parts of this14:00that we would have done in in any14:02situation and so I haven’t spent a lot14:04of time in categorizing those two14:06because to me this is about America it’s14:10not about which bucket you put things in14:12yeah but actually it does matter which14:16bucket you put things in because I would14:18rather put things in a bucket labeled14:19smart economic policy than one labeled14:22put money in here I like money thanks14:24dummies Tim Cook and look look there are14:27legitimate debates over how and how much14:30we should tax corporate profits but we14:32just had a huge chance to reform our tax14:34code and we absolutely blew it because14:37effective tax reform is not just about14:39lowering rates14:40it’s about closing loopholes for14:42instance one reasonable idea raised last14:44year was forcing companies to pay a14:46minimum tax in every single country they14:49operate in it’s a bit complicated but14:51that may well have reduced their abuse14:53of tax havens but that proposal never14:55even got out of committee so the result14:57here is that our tax code is still full14:59of loopholes and however much Trump15:01talked about how tax reform would15:03benefit cops and pipefitters15:05it’s worth knowing that once he got15:07behind closed doors his message seemed15:09to change15:09we’re told the president is still15:11celebrating passage of the Republican15:13tax cut bill sources with firsthand15:16which tells CBS News that he told a15:18group of wealthy people at his exclusive15:20mar-a-lago estate quote you all just got15:24a lot richer that’s right so on Tuesday15:28as you scrape together your taxes and15:30like cardi B wonder what Uncle Sam is15:32doing with your motherfucking money rest15:35assured that Donald Trump’s tax reform15:37continues to let companies engage in15:39sophisticated tax avoidance schemes and15:41to those companies I say this on behalf15:44of America please enjoy this double15:46Irish with a Dutch sandwich I made it bu15:49myself eat it while it’s hot15:52[Applause]16:00you