In the immediate aftermath of Japan's worst earthquake on record and the cataclysmic tsunami that followed, the business wires found a silver lining.
Now, they cheerfully chirped the Yen was showing surprising strength. Why? Because odds were improving that Japanese multinational companies would begin to repatriate tens of billions of dollars they were stashing off-shore to avoid Japan's taxes to fund their country's reconstruction. The Economist once estimated Japanese multinationals stash something like $156 billion off shore.
So just what would have to befall the United States before we could expect our multinationals to repatriate the trillion dollars they are keeping in off-shore tax havens such as the Cayman Islands?
High unemployment, layoffs of thousands of teachers, cops and firefighters?
Don't hold your breath.
Professor Jeffrey Sachs, Director of Columbia University's Earth Institute, says we are living in a time where the combination of technology and globalization has put nation-states at a total disadvantage when trying to hold multinationals accountable.
He says the deck is further stacked against the public interest and regular taxpayers because both political parties are constantly soliciting donations from those very same corporate interests for their campaigns.
"We are living in a very imbalanced age where things have tipped entirely to the advantage of multinational corporations and the billionaires," says Sachs. "Multinationals and billionaires are shunning their responsibility to America either by not paying taxes and not hiring."
And while illegal, off-shore tax evasion is depriving the U.S. Treasury of tens of billions annually, the real travesty maybe in what's legal. Professor Sachs says thanks to something called "transfer pricing," American-based multinationals can legally assign the profits they make here in the U.S. to off-shore tax havens beyond the reach of Uncle Sam.
Sachs says such massive tax avoidance shifts the burden for paying for government at all levels to American taxpaying households.
"The government can turn and say 'sorry we have to cut these programs for the poor and middle class. It's all a lie," says Sachs. And the trickle-down scarcity hits the states and municipalities where "phony battles" erupt between public employees like teachers and irate taxpayers, according to Sachs.
In 2009, Sens. Byron Dorgan (D-ND) and Carl Levin (D-Mi) released a Government Accountability Office report that showed just how pronounced the trend had become.
"This report shows that some of our country's largest companies and federal contractors, many of which are household names, continue to use off-shore tax havens to avoid paying their fair share of taxes to the U.S," wrote Dorgan. "And, some of those companies have even received emergency economic funds from the government."
GAO reported Citigroup alone had set up over 400 subsidiaries in places like Luxembourg, Cayman Islands and the British Virgin Islands. Out of the nation's 100 largest publicly traded companies, 83 had off-shore tax haven entities and 63 of the the 100 largest federal contractors who got much of their revenue out of the U.S. Treasury had a network of 50 off-shore tax havens.
And so now we are left with a battle over the domestic budget in Congress.
Cut programs for heating assistance for the poor, help for the homeless and programs to regulate Wall Street. Let the battle be joined over the crumbs and don't dare ask who swiped the whole picnic.