Hightower Lowdown

The British Virgin Islands--the very name conjures up a Caribbean paradise of soft sand beaches, tropical breezes, and the leisurely island lifestyle. Surprisingly, though, this tiny spot is home to more than 400,000 major corporations!

Not that you'd find any factories, corporate headquarters, or even employees on the islands. Indeed, all 400,000 companies are located in one gray, two-story building in the town of Tortola. This is where the global giants register incorporation papers for their very special subsidiaries. You see, the place is a tax haven. By registering there, corporations can claim they are based on the islands--even though they do no business there--letting them dodge paying taxes back home.

President Obama says he'll close loopholes, like this scam, that allow such giants as Goldman Sachs, Microsoft, Citigroup, Pfizer, and Procter & Gamble to evade taxes.

Since corporate America's lobbyists and political lapdogs wrote these loopholes into our taxcode, 83 of the 100 largest U.S. corporations have created subsidiaries to stash profits in such places as the Caribbean, Liechtenstein, the Philippines, Uruguay, and Labuan--wherever that is.

Citigroup, for example, has created 427 of these tax-avoidance subsidiaries! In the past six years, it has more than quadrupled the amount of profits it tucks into the havens, presently stashing nearly $23 billion in them. This is the same Citigroup that has taken a $45-billion bailout from us taxpayers. See more at Public Interest Research Group--www.uspirg.org