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The United States’ worldwide system of corporate taxation requires multinational corporations to pay taxes twice, first to the foreign country in which they do business and then to the IRS after they repatriate their profits.
Multinational corporations reported paying $128 billion in corporate taxes to foreign countries on $470 billion of taxable income in 2010, according to most recent IRS data.
60 percent of income earned abroad was by manufacturers. Most was income from petroleum and coal manufacturers, who paid an average effective tax rate of 36 percent.
In some cases, U.S. law allows a company to simply maintain a post office box at an offshore site to reap the tax benefits. For example, one five-story office building in the Cayman Islands serves as the registered address for 18,857 registered subsidiaries.
According to the study, the 30 worst offenders account for 65 percent of the total estimated offshore profits, booking as much as $1.4 trillion overseas for tax purposes