Coca-Cola fined $3.3 billion for defrauding Americans out of tax money while buying off state GMO-labeling elections
by: J. D. Heyes
(NaturalNews) Recently, Coca-Cola made a disclosure that most Americans heard nothing about, even though it affects nearly everyone.
Tucked into a corporate filing, the company announced that it would be paying $3.3 billion in back taxes to the U.S. government – money the government uses to fund everything from national defense to, ironically, the people charged with collecting Coca-Cola’s back taxes.
The reason for the tax, according to the company filing, is for the company’s allegedly inappropriate use of transfer pricing in order to shift tangible property out of the U.S. and into low-tax havens around the world.
“Put another way,” says a blog post at Citizens for Tax Justice, an advocacy group, “the company appears to be pretending, for tax purposes, that some of the income it earns each year in the United States was actually generated in another country.
That is another issue all on its own. Like many other Fortune 500 companies, Coca-Cola keeps a huge portion of its liquid assets offshore in order to escape the highest corporate tax rate in the developed world of 35 percent. Congress is, once again, looking into how the U.S. government can legally get its hands on what would be a major cash cow. For Coke, the company disclosed at the end of 2014 that it had an astounding $33.3 billion in permanently reinvested foreign earnings, which is the 16th highest amount on the Fortune 500 list. These are earnings that the company has said will remain offshore for the foreseeable future, which means they won’t have to pay one dime of tax on the money.
Not “The Real Thing”
As Citizens for Tax Justice further noted:
Even without the help of an official notice from the Internal Revenue Service, one could be forgiven for suspecting that all was not right with Coca-Cola’s statements about the location of its profits. In 2014, the company generated 43 percent of its worldwide revenue in the United States, but somehow that only translated into 17 percent of its income being in the U.S.
In addition, a 2014 CTJ report found that Coke had at least 13 subsidiaries located in known foreign tax havens, including three in the Cayman Islands.
These facts alone do not constitute proof that Coca-Cola is aggressively shifting U.S. profits over to tax havens, but it only follows that the most likely reason to have three subsidiaries in places like the Caymans is to shift profits there – and the IRS is accusing the company of doing just that.
Coke is spending some money in the U.S., however
In all, Coke’s $33 billion in offshore cash is a big chunk of what some estimates put at about $2 trillion total from all U.S. corporations sitting offshore – a sum that has many in Congress salivating. On one side of the aisle, some lawmakers say those are legitimate foreign earnings that big corporations would like to bring back into the country if the Legislative Branch and the President approve a measure lowering the corporate tax rate.
However, “skeptics argue that these companies are simply moving their U.S. profits offshore on paper in hopes of reaping tax rewards,” the CTJ blog said. “The latest disclosure from Coca-Cola strengthens the argument that this mountain of allegedly ‘foreign’ offshore profits are not, in fact, ‘the real thing’ at all.
The loss of tax revenue is one thing, but by selling its unhealthy products and worsening Americans’ health overall, Coke is not only contributing to poor dietary habits but also avoiding having to contribute anything to the cost of making them well.
Not a bad gig if you can get it.
This doesn’t mean Coke isn’t spending money in America at all. Coke – along with special interest groups like the Grocery Manufacturers Association – has put millions into defeating statewide GMO labeling efforts, even as they continue to make money peddling their poisons to the general public
Read more: http://www.naturalnews.com/051449_Coca-Cola_tax_havens_GMO_labeling.html