Tax Avoidance and “Nike”

Who likes to pay taxes? Well I believe that this is fairly simple question with fairly simple answer: “no one”, but we all have to do it anyway right? And at this point the issue is becoming more complex. For instance You as a normal worker, a person who is just trying to make a living is obliged to “share” your income with the government. But in the same time big corporations found their way to avoid paying taxes. Sounds like a bad joke? But it is not. This is an explanation how does it works:

It is obvious that everyone is trying to get richer and richer, but in the case of “Nike” sweatshops and underpaid workers are not the only way how to rise their profits. Another way of doing it, is (Yes you thinking right) tax avoidance. Bot how such a big corporation is able to do it? Obviously the answer is tax havens. In 2013 “Nike”  reports that its cache of “permanently reinvested offshore profits” had grown from  $5.5 billion to $6.7 billion. So if this corporation would pay taxes in the US, the amount of which they had to return would be $2.2 billion. So did they do it? Of course not, that is why our precious “Nike” has a  long list of offshore subsidiaries includes twelve shell companies in Bermuda alone, ten of which are named after one of Nike’s own shoes: Air Max Limited, Nike Cortez, Nike Flight, Nike Force, Nike Huarache, Nike Jump Ltd., Nike Lavadome, Nike Pegasus, Nike Tailwind and Nike Waffle! But why offshore? Well when the corporation is moving their brand names and intellectual property to tax havens  subsidiaries, the subsidiaries can charge the parent company by using the “brand names”, and these transactions reduce the taxable income. So who are the winner? Again a corporation. And how about the losers? Obviously the government, state (try to imagine how those billions of dollars/pounds might boost the economy) and obviously US the normal tax payers especially in times of crisis, where we have to pay more, when the “big brands” are paying nothing.



Jacek Bazis


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