$ 5,000 Flashlights: They’re Not Just for the Pentagon Anymore

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With last year’s tax cut leaving the budget surplus but a fond memory, the nation’s lawmakers are now scrambling for ways to supplement federal coffers. A logical place to start might be a crackdown on corporate tax trickery. In 2000 alone, according to a recent study conducted by two Florida International University researchers at the behest of Senator Byron Dorgan (D-ND), multinational corporations shirked more than $45 billion in U.S. taxes through an increasingly popular scheme known as transfer pricing.

The practice works something like this: The U.S. branch of a multinational imports goods from a foreign subsidiary at wildly inflated prices — say, $935 a pop for watch batteries. The U.S. arm might then export goods to its sister outfits offshore for drastically discounted prices — say, rocket launchers at $40 apiece. The net effect? The U.S. branch appears to bleed red ink, while the multinational parent rolls in profits safely out of Uncle Sam’s reach.

The examples of such “abnormal transactions” listed here are culled from Commerce Department trade data. (Note to the IRS: Enforcement might be easier if next time the department includes the names of the corporations involved.)

U.S. imports

Toothbrush: $5,655
Disposable razor blade: $461
Flashlight: $5,000
Vinyl record: $5,670
Ink-jet printer: $179,000

U.S. exports

Bulldozer: $528
Fine diamonds: $3/carat
Automatic teller machine: $36
Prefabricated metal building: 82 cents
Military aircraft: $20,000

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Fact:

In-depth journalism that investigates the powerful takes real money and is so damn important right now.But it doesn’t take a Mother Jones investigation to know that billionaires and corporations will never fund the type of reporting (like they do politicians) we do that exists to help bring about change. Instead, our mission-driven journalism is made possible by people power, and has been for 46 years now since our founding as a non-profit.

In “TITLE TK” Monica Bauerlein writes about the perilous moment we’re in, and why it’s so important that we raise $325,000 by the time November’s midterms are decided so we can be ready to throw everything we have at the big issues facing the nation no matter what happens. Please help MoJo’s people-powered journalism with a donation today.

$400,000 to go!

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