Off-shore tax havens cost New Jersey $2.8 billion in lost tax revenue last year, enough to pay the salaries of every New Jersey firefighter, police officer, EMT and 911 dispatcher, according to a report issued this week by a public interest group.
Nationwide, states lost approximately $39.8 billion in revenue due to corporations and wealthy individuals sheltering money in foreign tax havens while $150 billion in federal tax revenue is lost, the group says.
“Tax dodging is not really a victimless defense,” Peter Skopec, an official with the New Jersey Public Interest Research Group, said yesterday at a Downtown Jersey City gallery and framing store.
The group, working with the Main Street Alliance, a network of small-business owners, picked Gallerie Hudson on Newark Avenue for yesterday’s presentation to show the effect offshore tax havens have on local business owners, according to Skopec and Corinne Horowitz, a business representative with the Main Street Alliance.
The two called out a number of corporations that have reportedly paid little if any federal taxes in recent years despite showing profits. Wells Fargo made $49 billion in profit from 2008 to 2010 and paid a negative tax rate, according to a report from the Citizens for Tax Justice.
Google, meanwhile, used “accounting tricks” to lower its 2011 tax bill by $2 billion, Skopec said today.
The lost revenue means other taxpayers have to pay more, or funding is cut to social services to bring budgets into line, he added.
“You should pay taxes based on what you owe rather than on how clever your accounting department is,” Skopec said.
Requests for comment from Google were not returned. Wells Fargo spokesman Kevin Friedlander disputed the claim by Citizens for Tax Justice, adding that the banking giant does indeed pay federal corporate income taxes, to the tune of $6.8 billion since 2008.
“Wells Fargo is proud to be a responsible corporate citizen and honors its obligations at the federal, state and local levels,” Friedlander said.
Phillip Stamborski, owner of Gallerie Hudson, said he pays about 28 percent of his income in federal taxes. It “upset” him to learn that corporations and the wealthy can save billions while others with less income pay more.
“We’re the people who can least afford it,” Stamborski said. “Why should my tax rate be six times theirs?”