U.S. corporate giants such as Apple, Walmart and General Electric have stashed $1.4 trillion in tax havens, despite receiving trillions of dollars in taxpayer support, according to a report by anti-poverty charity Oxfam.
The sum, larger than the economic output of Russia, South Korea and Spain, is held in an “opaque and secretive network” of 1,608 subsidiaries based offshore, said Oxfam.
The charity’s analysis of the financial affairs of the 50 biggest US corporations comes amid intense scrutiny of tax havens following theleak of the Panama Papers.
And the charity said its report, entitled Broken at the Top was a further illustration of “massive systematic abuse” of the global tax system.
Technology giant Apple, the world’s second biggest company, topped Oxfam’s league table, with some $181 billion held offshore in three subsidiaries.
Boston-based conglomerate General Electric, which Oxfam said has received $28bn in taxpayer backing, was second with $119 billion stored in 118 tax haven subsidiaries.
Computing firm Microsoft was third with $108 billion, in a top 10 that also included pharmaceuticals giant Pfizer, Google’s parent company Alphabet and Exxon Mobil, the largest oil company not owned by an oil-producing state.
Oxfam contrasted the $1.4 trillion held offshore with the $1 trillion paid in tax by the top 50 US firms between 2008 and 2014.
It pointed out that the companies had also enjoyed a combined $11.2 trillion in federal loans, bailouts and loan guarantees during the same period.
Overall, the use of tax havens allowed the US firms to reduce their effective tax rate on $4tn of profits from the US headline rate of 35% to an average of 26.5% between 2008 and 2014.
The charity said this had helped firms spend billions on an “army” of lobbyists calling for greater state support in the form of loans, bailouts and guarantees, funded by taxpayers.
The top 50 US firms spent $2.6bn between 2008 and 2014 on lobbying the US government, Oxfam said.
“For every $1 spent on lobbying, these 50 companies collectively received $130 in tax breaks and more than $4,000 in federal loans, loan guarantees and bailouts,” said Oxfam.
Robbie Silverman, senior tax adviser at Oxfam said: “Yet again we have evidence of a massive systematic abuse of the global tax system.