As part of a research project with Adam Rosensweig we examined a GAO report on U.S. companies using tax havens.  The report finds that 83 of the largest U.S. companies sampled had at least one subsidary in a country considered a tax haven.

Given how easy it is to use havens to avoid taxes, why don’t they all use tax havens?  Some companies, such as Walmart, have few foreign affiliates in general, and struggle to shift profits overseas given the structure of their business.

But there are a quick a few high tech companies that have patents that they could park offshore, yet they don’t seem to use tax havens.  Why?

Adam identified a statute (6 U.S.C.A. § 395) that specifically bars companies receiving government contracts from using tax havens (“inverted domestic corporations”).  There seems to be a least one straightforward way to control the use of tax havens.