US tax-dodging firms exposed by Sundance film

US multinationals make billions of dollars in profit but can pay no federal tax due to “legal but immoral” tax arrangements, according to a scathing film at the Sundance film festival.

We’re Not Broke tackles head on issues currently being thrashed out between Republican presidential candidates, over the fairness of America’s tax code in particular as budgets are slashed.

The film by Karin Hayes and Victoria Bruce is in competition for best US documentary at the independent film festival, which closes this weekend in the ski resort of Park City, Utah.

The film explains how business titans like Google, Bank of America, General Electric (GE) and Exxon managed to pay no federal tax, even when their profits are mostly made in the US.

“They can absolutely afford to pay taxes. About a third of their profits should be going to tax, to pay for our roads, our schools, our military, and feed people and the arts,” co-director Bruce told AFP.

“You have GE, that is a sponsor of Sundance. If they care about the arts, I suggest they pay their taxes, because little kids don’t even have art at schools because all the school budgets have been cut so much.”

And she said: “Now a lot of companies are based on intellectual properties, like Google’s search engine, for example. There’s no product.

“So they can actually sell that technology to a corporation they own in the Cayman Islands where there is a zero per cent tax and pretend that they have to use all the profits they have in the US to pay the rights to use the software.”

The same thing with the drug companies, she said.

“Drug companies here are absolutely horrible, they... tell us: ‘We don’t make any profit in the US.’ And we know that it’s totally untrue.”

“The corporations keep saying that it’s legal. But is it moral?”

The film highlights the complexity of the US federal tax code for companies, which often use their financial muscle, via lobbyists on Capitol Hill, to push through additions, modifications or exemptions to the rules.

“Although politicians may talk about wanting to close corporate tax loopholes, they are in sort of a cage because they have to raise so much money for their campaigns, who are they going to get that money from?” said Hayes.