It is no secret at all that major U.S. companies keep billions of dollars locked up overseas. What is debated often is how much this money should be taxed, or if it should be taxed, here in the United States. Whether you call this tax avoidance or you consider it good business may depend on your politics or your position in the business world. The numbers that a report from the U.S. Public Interest Research Group show are massive, showing that just 58 of the Fortune 500 companies would owe $212 billion in additional federal taxes if profits were not officially booked offshore.

This report was not compiled by 24/7 Wall St. Readers should know going in that this a very one-sided report, and its name of Offshore Shell Games may sum up the group’s angle. The report was compiled by the Citizens for Tax Justice, the Institute on Taxation and Economic Policy, and the U.S. PIRG Education Fund. It aims to show the use of offshore tax havens as a means of avoiding up to $717.8 billion in U.S. taxes.

This report shows that Fortune 500 companies are holding nearly $2.5 trillion in accumulated profits offshore for tax purposes. According to Offshore Shell Games, just 30 of the Fortune 500 companies account for 66%, or a whopping sum of $1.65 trillion, of these offshore profits.

One issue pointed out here is that just 58 Fortune 500 companies disclose what they would expect to pay in U.S. taxes if those profits were not officially booked offshore. The report says:

In total, these 58 companies would owe $212 billion in additional federal taxes. … If we assume that average tax rate of 6.2 percent applies to all 298 Fortune 500 companies with offshore earnings, they would owe a 28.8 percent rate upon repatriation of these earnings, meaning they would collectively owe $717.8 billion in additional federal taxes if the money were repatriated at once.

What stands out here is that Offshore Shell Games goes on to show which companies are the “worst offenders” of them all. In an effort to streamline these, we have altered the order for largest sums first, and we have tried to include what the Offshore Shell Games showed for foreign subsidiaries. They show the following:

• Apple was said to have booked $214.9 billion offshore, and it would owe $65.4 billion in U.S. taxes if these profits were not officially held offshore for tax purposes.
• Pfizer was shown to hold $193.6 billion in profits offshore for tax purposes and to operate 181 subsidiaries in tax havens.
• Google was said to have increased the amount of earnings it reported offshore from $12.3 billion to $58.3 billion in recent years.
• Citigroup, with 140 subsidiaries in offshore tax havens, officially reports $45.2 billion offshore for tax purposes, on which it would owe $12.7 billion in U.S. taxes. That implies a 7% tax rate on its offshore profits to foreign governments.
• PepsiCo was shown to be holding $40.2 billion offshore for tax purposes, maintaining 135 subsidiaries in offshore tax havens.
• Goldman Sachs was said to officially hold $28.6 billion offshore. Goldman Sachs had 987 subsidiaries in offshore tax havens (some 537 of which are in the Cayman Islands).
• Wal-Mart, with the report citing Americans for Tax Fairness, is shown to operate as many as 75 tax haven subsidiaries. Its offshore profit has grown from $8.7 billion in 2006 to $26.1 billion in 2015.
• Nike was shown to hold $10.7 billion offshore for tax purposes, and the claim is that Nike would owe $3.6 billion in U.S. taxes, implying that Nike pays a 1.4% tax rate to foreign governments on those offshore profits.

Here is how the report starts off:

U.S.-based multinational corporations are allowed to play by a different set of rules than small and domestic businesses or individuals when it comes to paying taxes. Corporate lobbyists and their congressional allies have riddled the U.S. tax code with loopholes and exceptions that enable tax attorneys and corporate accountants to book U.S. earned profits to subsidiaries located in offshore tax haven countries with minimal or no taxes. The most transparent and galling aspect of this is that often, a company’s operational presence in a tax haven may be nothing more than a mailbox. Overall, multinational corporations use tax havens to avoid an estimated $100 billion in federal income taxes each year.

Offshore Shell Games also points out that most of America’s largest corporations maintain subsidiaries in offshore tax havens. At least 367 companies (73% of the Fortune 500) operate one or more subsidiaries in tax haven countries, with at least 10,366 tax haven subsidiaries combined.

Up front, in the Acknowledgments, the review shows that the authors bear responsibility for any factual errors and that the recommendations are those of the U.S. Public Interest Research Group Education Fund, Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

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Again, Offshore Shell Games is an outside report that is very much of one-sided view of taxes on international profits. One of the report’s tables (see below) shows the top 30 companies with the most money held offshore.

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