Are you left wondering why schools are missing funding? Big companies like Amazon, Starbucks, Google and Apple are using a method called “Tax Haven,” which gives them the ability to avoid billions of dollars of taxes to keep money for themselves instead of the government. In fact, it is reported that in 2015 alone, the US lost roughly 500 billion dollars in taxes due to companies using this method.
In fact, on Thursday February 6th, 2020 Apple made $1902.31 in profits and $8487.12 in revenue. Amazon, one of our nation’s biggest corporations, didn’t pay a single cent in federal taxes. Amazon itself has used this method to dodge over 1.18 billion dollars in income taxes and 2.6 billion dollars in corporate tax.
First of all, what is a tax haven? A tax haven is generally an international offshore bank account from another country with very low tax rates. For example, Amazon sends their money to the poor area of Hong Kong. From there it then sits there and is frozen, just far enough so the companies can’t get it, but it also isn’t lost so they can still make profits.
In some cases different international locations can be identified as tax havens if they have special tax laws. For example, Florida, Alaska, Nevada,New Hampshire, Texas, and Tennessee require no state income tax. A great video by PolyMatter was released on February 23rd, 2018 explaining Apple’s case with Ireland’s tax haven in specific, you can find the video here.
This method is used by all sorts of companies all over the world, at one point even the U.S. was even being used as a tax haven for out of country companies and corporations. Some of the most popular countries used for tax haven are Bermuda, Ireland, the island of New Jersey, Hong Kong and much more. Although don’t be fooled that you can do it for your yearly taxes, this method costs a lot of money to get started, but for most large companies and corporations it’s a good investment and a very helpful way to save money and keep it out of reach of greedy governments.