United States as a Tax HavenIt should be noted that the global corporate tax proposed by the Organisation for Economic Co-operation and Development (OECD) does not deal with tax havens, where corporations and wealthy individuals conceal their money through trusts and other devices. A Wikipedia article on tax havens mainly located in the United States, notes: "The U.S. receives tax and asset information for American assets and income abroad, but does not share information about what happens in the United States with other countries. In other words, it has become attractive as a tax haven. "The Tax Justice Network ranks the U.S. third in terms of the secrecy and scale of its offshore financial industry, behind Switzerland and Hong Kong but ahead of the Cayman Islands and Luxembourg. "Andrew Penney from Rothschild & Co described the U.S. as 'effectively the biggest tax haven in the world' and Trident Trust Co., one of the world's biggest providers of offshore trusts, moved dozens of accounts out of Switzerland and Grand Cayman, and into Sioux Falls, saying: 'Cayman was slammed in December, closing things that people were withdrawing ... I was surprised at how many were coming across that were formerly Swiss bank accounts, but they want out of Switzerland.' "A 2012 study by various U.S. universities showed that the U.S. has the most lenient regulations for setting up a shell company anywhere in the world outside of Kenya. Tax havens such as the Cayman Islands, Jersey and the Bahamas were far less permissive, researchers found, than states such as Nevada, Delaware, Montana, South Dakota, Wyoming and New York. '[Americans] discovered that they really don't need to go to Panama,' said James Henry of the Tax Justice Network. For example, a single address in Wilmington (1209 North Orange Street) is listed as the headquarters for at least 285,000 separate businesses due to Delaware's desirable corporate taxes and law, and it is estimated that $9 billion of potential taxes is lost over the past decade, due to the Delaware loophole. Both Hillary Clinton and Donald Trump have firms registered in North Orange Street, and lawyers, trust companies and financial firms including Rothschild & Co are moving offshore accounts from locations such as Switzerland and the Cayman Islands into the U.S. to take advantage of the country's loose regulations, calling it the 'new Switzerland.' "Mark Hays of Global Witness said, 'The U.S. is one of the easiest places to set up so-called anonymous shell companies,' and Stefanie Ostfeld from the same organization said that 'the U.S. is just as big a secrecy jurisdiction as so many of these Caribbean countries and Panama.' More than 1.1 million live legal entities were incorporated in Delaware at the end of 2014. An increasing number -- more than 70 per cent -- of those were LLCs (limited liability companies). The Delaware Division of Corporations said in August 2015 that 'an LLC entices all types of people since it is easy to operate and oversee,' and Delaware is currently one of the few states without sales tax. Delaware does not tax companies which operate there, nor their royalty income. However, the LLC is more popular and often less expensive in states such as Wyoming, Nevada and Oregon. Approximately 668,000 anonymous LLCs are registered just in those three states." Offshore Tax AvoidanceThe Wikipedia article continues: "Despite this, the U.S. Public Interest Research Group (PIRG) said in 2014 that the United States loses roughly $184 billion per year due to corporations such as Pfizer, Microsoft and Citigroup using offshore tax havens to avoid paying U.S. taxes. According to PIRG: "- Pfizer paid no U.S. income taxes 2010-2012, despite earning $43 billion. The corporation received more than $2 billion in federal tax refunds. In 2013, Pfizer operated 128 subsidiaries in tax havens and had $69 billion offshore which could not be collected by the Internal Revenue Service (IRS); "- Microsoft maintains five tax haven subsidiaries and held $76.4 billion overseas in 2013, thus saving the corporation $24.4 billion in taxes; "- Citigroup maintained 21 subsidiaries in tax haven countries in 2013, and kept $43.8 billion in offshore jurisdictions, thus saving the corporation an additional $11.7 billion in taxes." A Guardian article reports, "Many super-rich people are choosing South Dakota, which has created the most potent force-field money can buy -- a South Dakotan trust. If an ordinary person puts money in the bank, the government taxes what little interest it earns. Even if that money is protected from taxes by an ISA [individual savings account], you can still lose it through divorce or legal proceedings. A South Dakotan trust changes all that: it protects assets from claims from ex-spouses, disgruntled business partners, creditors, litigious clients and pretty much anyone else. It won't protect you from criminal prosecution, but it does prevent information on your assets from leaking out in a way that might spark interest from the police. And it shields your wealth from the government, since South Dakota has no income tax, no inheritance tax and no capital gains tax. "A decade ago, South Dakotan trust companies held $57.3 billion in assets. By the end of 2020, that total will have risen to $355.2 billion. Those hundreds of billions of dollars are being regulated by a state with a population smaller than Norfolk [England], a part-time legislature heavily lobbied by trust lawyers, and an administration committed to welcoming as much of the world's money as it can. U.S. politicians like to boast that their country is the best place in the world to get rich, but South Dakota has become something else: the best place in the world to stay rich. [...] "In just three years, the amount of money held via secretive structures in the U.S. had increased by 14 per cent, the Tax Justice Network said. That is the money pouring into Sioux Falls, and into the South Dakota Trust Company." For further information, see the Americans for Tax Fairness article on tax havens here. See also this report on U.S. tax havens here for current corporate tax rates throughout the world.
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