The 50 biggest US companies now have over $1.6 trillion in cash stowed away in offshore tax havens, according to a new report based on corporate disclosures.
The amount of cash kept overseas and out of reach from the IRS increased by $200 billion last year, according to the Oxfam report, which looked at the financials of corporate giants like Apple, Walmart, Pfizer and Goldman Sachs. The report found a network of least 1,751 corporate subsidiaries in tax havens around the world, including Panama, the Bahamas, and the Cayman Islands.
The wealth kept overseas "could provide much-needed funds to fight poverty and inequality here and around the world," said Robbie Silverman, Senior Advisor for Oxfam America and one of the authors of the report.
Oxfam's analysis does not accuse any of the companies of illegal activity. Rather, it demonstrates the degree to which American companies are using the existing system to their advantage to avoid paying hundreds of billions of dollars in taxes.
"As the 50 companies earned over $4.2 trillion in profits globally, they used offshore tax havens to lower their effective overall tax rate to just 25.9% according to the most generous estimate of their tax payments, well below the statutory rate of 35% and even below average levels paid in other developed countries," the report's authors wrote.
Reforming the US corporate tax system has been a long-stated goal of politicians of all stripes, and President Trump has proposed his own plan, which would include a one-off chance to bring overseas money back into the US at a lower tax rate.
That so-called tax holiday would provide a windfall of more than $312 billion to the 50 largest US companies, Oxfam estimates, with just four companies — Apple, Pfizer, Microsoft and General Electric — together saving $132 billion.