Oxfam’s analysis of new data shows that American and European banks appear to be moving billions of dollars in profits to tax havens, making it harder for countries all over the world to invest in schools, roads, and hospitals, and other vital services to lift their citizens out of poverty.

When asked why he robbed banks, Willie Sutton famously responded, “Because that’s where the money is.”  In 2017, that brilliant answer no longer holds—to access banks’ money today, Willie would have to book a flight to Ireland, Luxembourg, or the Cayman Islands—the preferred destination for more and more of the profits made by the world’s biggest banks.

Disclosures mandated by new European Commission laws reveal brazen signs of tax dodging by the largest American and European banks, according to a new report, “Opening the Vaults,” released today by Oxfam and the Fair Finance Guide International.  At the same time, new tax reform proposals by President Trump and Congress would make it easier, not harder, for American companies to take advantage of glaring tax loopholes.

In the report, Oxfam analyzed new financial data released by Bank of America, Citi, Goldman Sachs, JPMorgan Chase, Morgan Stanley and Wells Fargo, alongside Europe’s 20 biggest banks, finding that banks are registering tens of billions of dollars in profits in tax havens, well out of proportion to the level of real economic activity that occurs there.  This data—released under public country-by-country reporting requirements for banks operating in Europe—demonstrates that banks are likely avoiding paying their fair share of tax by artificially shifting their profits to tax havens that charge very low tax rates.

While the EU has increased its reporting requirements, the US is moving in the opposite direction.  New proposals by President Trump and Congress would increase the scale of corporate tax dodging by US companies, pushing the US even further behind and rigging the rules even more in favor of multinational companies at the expense of working families.

Our analysis found that the top six US banks earned 9 percent of their global revenues in EU countries in 2015, but only made 1 percent of their global tax payments there.

Looking at the top 6 US banks, the report finds that:

• US banks’ EU subsidiaries in tax havens are twice as profitable on average (41 percent average profit margin) as their other subsidiaries (21 percent average profit margin) suggesting that banks may be manipulating their business practices to report profits in tax havens rather than where they are really earned.
• US banks on average made a 43 percent profit margin on their earnings in Ireland—which Oxfam, and others, have branded a tax haven. Ireland accounts for three-quarters of all the profits earned in tax havens.
• Goldman Sachs’ subsidiary in the Cayman Islands reported $100 million in profits despite paying $0 in tax and employing no staff. This single subsidiary earned more than 1 percent of all profits made by all US banks in Europe without having to hire a single person or spend a single dollar in expenses.
• Morgan Stanley has a subsidiary in Jersey which reported $6 million in profits, with no staff and paying no tax.
• Wells Fargo reported that it made 65 percent of its EU profits in tax havens.

The report does not accuse any of the banks of acting illegally—rather, the new disclosures demonstrate how the current tax system permits companies to dodge billions of dollars of tax within the bounds of the law.

Because the US does not require banks to report their profits and tax payments in all the countries in which they operate, we must rely on information from the EU and have only a limited picture of the scope of possible tax dodging by US banks.

We have a more complete—and shocking—portrait of European banks.  Altogether, Europe’s 20 biggest banks registered more than $26 billion in profits, over a quarter of their overall profits, in tax havens.

Looking at the top 20 European Banks the report finds:

• Bank employees in tax havens appear to be 4 times more productive than the average bank employee – generating an average profit of $184,000 per year compared to just $48,000 a year for an average employee, which suggests a disproportionate share of profits in tax havens.
• In 2015 European banks posted at least $675 million in profits in tax havens where they employ nobody. For example, the French bank BNP Paribas made $144 million tax free profit in the Cayman Islands despite having no staff based there.
• Banks often pay little or no tax on the profits they post in tax havens. European banks paid no tax on $411 million of profit they posted in seven tax havens in 2015.

When huge multinational companies like banks don’t pay their rightful share of tax, governments don’t have the resources they need to invest in schools, hospitals, road, and the shared services we all need.  This is particularly true in developing countries, which rely even more heavily on corporate tax revenue to fund vital needs like health care and education to lift their citizens out of poverty.

The new disclosures demonstrate that banks are likely playing games with where they report profits in order to avoid taxes.  This is something that most small businesses can’t do (because they’re not multinational) and no individuals except the super wealthy can do.  It’s not fair and it’s unethical.  And it means that everyone else has to pay more – or suffer from dysfunctional, under-funded government.

The US must mandate greater transparency for all companies, close corporate tax loopholes, and lead a global crackdown on tax havens.  Oxfam’s new report provides a clear answer why: “Because that’s where the money is.”