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3c hapter - Index of
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The Local Imperative 57<br />
In the meantime, millions <strong>of</strong> American jobs have been shipped<br />
overseas. The foreign subsidiaries and affi liates <strong>of</strong> U.S. multinational<br />
fi rms added 729,000 employees between 2006 and 2008, for a total<br />
<strong>of</strong> 11.9 million, according to Commerce Department data. Over the<br />
same two- year period, they cut 500,000 jobs at home, reducing their<br />
domestic workforce to 21.1 million. 24 (That’s one reason why U.S.<br />
manufacturing employment can decrease even as exports rise.)<br />
In addition to lost jobs, we get lost revenue. The <strong>of</strong>fi cial U.S.<br />
corporate tax rate is 35 percent, but few big companies actually pay<br />
that. According to a 2008 report by the Government Accountability<br />
Offi ce (GAO), a quarter <strong>of</strong> the country’s largest companies paid<br />
no federal income taxes in 2005 on their $1.1 trillion in gross<br />
sales that year. 25 None. General Electric raked in more than $14<br />
billion in worldwide pr<strong>of</strong>i ts in 2010. Not only did it not pay any<br />
U.S. taxes—it claimed a tax benefi t <strong>of</strong> $3.2 billion. All told, corporations<br />
accounted for just 6 percent <strong>of</strong> U.S. tax receipts in 2009,<br />
down from 30 percent in the mid-1950s. 26 With the United States<br />
facing a projected $1.4 trillion budget gap, the tax burden falls on<br />
smaller companies and ordinary citizens.<br />
Domestic companies with global subsidiaries cost U.S. taxpayers<br />
an estimated $37 billion a year in lost tax revenue, according<br />
to Business and Investors Against Tax Haven Abuse, a coalition <strong>of</strong><br />
small business and investor groups. Add in wealthy individuals, and<br />
the loss from overseas tax havens could be as much as $123 billion,<br />
according to the Treasury Department. At the higher range, the<br />
group points out, those funds could pay for a 12 percent tax cut<br />
for every individual.<br />
In 2007, Citigroup had 427 tax haven subsidiaries, Morgan<br />
Stanley had 273, Bank <strong>of</strong> America had 115, Lehman Brothers had<br />
57, JP Morgan Chase had 50, Goldman Sachs had 29, and AIG<br />
had 18, according to the GAO. In 2008, Goldman Sachs paid just<br />
$14 million in federal taxes on pr<strong>of</strong>i ts <strong>of</strong> more than $2 billion—<br />
an effective tax rate <strong>of</strong> less than 1 percent. That’s less than a third<br />
<strong>of</strong> Goldman CEO Lloyd Blankfein’s annual pay, Business and<br />
Investors Against Tax Havens points out.<br />
It’s not just fi nancial companies. Eighty- three <strong>of</strong> the top 100<br />
largest publicly traded companies park money in <strong>of</strong>fshore tax