Thursday, January 6, 2011

CJR: "Bloomberg Continues to Hit Corporate Tax Schemes"

From the Columbia Journalism Review's The Audit blog:
Jesse Drucker of Bloomberg has been doing some excellent reporting of the corporate-tax system and how companies are manipulating it to avoid billions in taxes.
Over the holidays, Bloomberg ran another Drucker piece reporting how corporations dodge—and that’s Bloomberg’s word there—about $25 billion a year in repatriation taxes.
The news hook is that corporate executives like Cisco billionaire John Chambers are asking the White House to give them another repatriation tax holiday like Bush did a few years ago (Bloomberg neatly dispenses with the stimulus justification there by noting corporations already sit on nearly $2 trillion in cash on their balance sheets).
What nobody’s saying publicly is that U.S. multinationals are already finding legal ways to avoid that tax. Over the years, they’ve brought cash home, tax-free, employing strategies with nicknames worthy of 1970s conspiracy thrillers — including “the Killer B” and “the Deadly D.”
Here’s how pharmaceutical giant Merck repatriated billions of dollars from overseas to buy another company, enabling it to skip a more than $3 billion tax bill. Here’s how it did that...MORE