By Eli Shroads, Congress Watch intern
Large corporations frequently are focused more on profits than the greater good, and that has meant many avoid paying their fair share of taxes. That leaves everyday American taxpayers to cover the cost of important government programs and services.
Many well-known companies participate in tax avoidance schemes that not only cost the everyday American greatly but can be risky for companies. These include oil and gas companies, such as Exxon, Chevron, and ConocoPhillips, and other companies with household names, such as Amazon. There are many methods by which corporations practice tax avoidance, but one very prevalent way is through the exploitation of the tax code booking profits to subsidiaries in foreign countries, which allow them to pay at a lower tax rate than they would in the U.S.
Public Citizen and many organizations fighting for the rights of consumers in the United States and abroad are proponents of tax transparency. Essentially if companies are going to avoid their taxes and pay less than they should, the public, and especially their shareholders, must not be kept in the dark.
As we push the Securities and Exchange Commission (SEC) to act to require tax transparency at all companies, the main way to achieve tax transparency in the interim is through shareholder action: voting on resolutions and pressuring the company into being more open about their finances. Successful shareholder tax transparency resolutions would require corporations to reveal their business with regards to the taxes they pay– including their profits, and where are they actually paying their taxes, on a country-by-country basis. This would protect the shareholders, who would have a more comprehensive understanding of the company they are investing in and the risky tax practices it may be engaging in.
On Tuesday, May 16, 2023, Public Citizen collaborated with Oxfam America to protest outside of an in-person shareholder meeting for ConocoPhillips in Houston, Texas where Oxfam America had proposed a tax transparency resolution that was up for a vote, and to ask the all-important question: what is the company hiding?
The people who can have the most profound impact on promoting tax transparency are the shareholders since they can vote on tax transparency resolutions such as the ones proposed by Oxfam. Even indirect shareholders with retirement funds through companies like Blackrock, State Street, and Vanguard can ask the companies that invest for them to support these resolutions since they own a lot of stock in these companies but have not historically voted in favor of transparency proposals.
There are several additional meetings of shareholders where tax transparency resolutions will be up for a vote: Amazon will have its meeting on May 24 and Exxon and Chevron will both hold their annual shareholder meetings on May 31. One quick way that you can have an impact on this fight is to sign the petition to Amazon’s shareholders urging a yes vote on tax transparency and the same for Chevron and Exxon. And, if you directly own shares, do not forget to vote in favor of shining a light on the tax practices of these companies.
It is time to stand up to these corporations and their exploitation of the tax system. Transparency of where companies are—or are not—paying taxes is an important step in the fight against tax avoidance.