Report: Offshore Tax Dodging Blows a $116 Million Hole in Maine State Budget
New Report Exposes the Real Cost of Tax Loopholes for Maine Small Businesses and Taxpayers
Today, the Maine Small Business Coalition, in partnership with the U.S. Public Research Interest Group, released a new report that reveals that Maine loses $58 million in revenue a year due to offshore tax dodging. Many of America's wealthiest individuals and largest corporations use tax loopholes to shift profits made in America to offshore tax havens, where they pay little to no taxes.
The report, titled “The Hidden Costs of Offshore Tax Havens,” was written by the U.S. Public Interest Group (PIRG) and co-released by the Maine Small Business Coalition. The report estimates that over a two-year budget period, Maine loses almost $116 million in revenue that individuals and corporations move offshore.
By using offshore tax havens, corporations and wealthy individuals shift the tax burden to small business and the middle class, forcing them to make up the difference by cutting public services or raising taxes on those who can least afford to pay.
"Tax dodging is not a victimless offense. When corporations skirt taxes, the public is stuck with the tab. And since offshore tax dodgers avoid both state and federal taxes, they hurt everyday taxpayers twice,” according to Dan Smith, Tax and Budget Advocate for U.S. PIRG and coauthor of the report. “States should be using that money to benefit the public.”
Representative Adam Goode (D-Bangor), co-chair of the Joint Standing Committee on Taxation, agreed."Our tax system pays for public structures we all count on. $58 million is a lot of money to lost, especially when legislators have consistently heard from people who come to us concerned about cuts,” said Goode. “A lot of legislators are new every year, and reports like this one that explain complex policy issues are interesting and present a new perspective for people in the Capitol. Any time we can look at new ideas to address people who have found a way to avoid their tax share is helpful,” added Goode.
"As a small business owner, I need to have a successful and thriving business to pay the bills," said Jean-Marie Caterina, a small business owner and MSBC member. "But it doesn't work for me, or for my state, when the rules are rigged and the playing field isn't level. Special loopholes and exemptions which allow big corporations to circumvent the rules give an unfair advantage to those corporations."
All told, state taxpayers across the country lost nearly $40 billion last year from offshore tax loophole abuse. At the national level, offshore tax loopholes cost federal taxpayers $150 billion each year, which would be more than enough to cover the scheduled spending cuts that are set to take effect in just a few weeks.
You can download the report here: http://www.uspirgedfund.org/reports/usf/hidden-cost-offshore-tax-havens