Corporate Welfare: Fantasy Islands

AND OTHER PERFECTLY LEGAL WAYS THAT BIG COMPANIES MANAGE TO AVOID BILLIONS IN FEDERAL TAXES

From her second-floor offices bordering the sparkling Caribbean at Charlotte Amalie, the capital of the U.S. Virgin Islands, Catherine Sittig presides over one of the corporate-welfare system's most enduring success stories.

Sittig's company represents hundreds of U.S. corporations--she won't say exactly how many--that have offshore affiliates in the islands. This isn't as demanding as it might sound. It's largely a matter of filing papers and mailing out invoices. After all, the companies she represents are just paper entities. But they have come to represent a drain, created by Congress and perfectly legal, of $1.7 billion annually on the U.S. Treasury.

It...

Want the full story?

Subscribe Now

Subscribe
Subscribe

Get TIME the way you want it

  • One Week Digital Pass — $4.99
  • Monthly Pay-As-You-Go DIGITAL ACCESS$2.99
  • One Year ALL ACCESSJust $30!   Best Deal!
    Print Magazine + Digital Edition + Subscriber-only Content on TIME.com

Learn more about the benefits of being a TIME subscriber

If you are already a subscriber sign up — registration is free!