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

Let our journalists help you make sense of the noise: Subscribe to the Mother Jones Daily newsletter and get a recap of news that matters.

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


Headshot of Editor in Chief of Mother Jones, Clara Jeffery

It sure feels that way to me, and here at Mother Jones, we’ve been thinking a lot about what journalism needs to do differently, and how we can have the biggest impact.

We kept coming back to one word: corruption. Democracy and the rule of law being undermined by those with wealth and power for their own gain. So we're launching an ambitious Mother Jones Corruption Project to do deep, time-intensive reporting on systemic corruption, and asking the MoJo community to help crowdfund it.

We aim to hire, build a team, and give them the time and space needed to understand how we got here and how we might get out. We want to dig into the forces and decisions that have allowed massive conflicts of interest, influence peddling, and win-at-all-costs politics to flourish.

It's unlike anything we've done, and we have seed funding to get started, but we're looking to raise $500,000 from readers by July when we'll be making key budgeting decisions—and the more resources we have by then, the deeper we can dig. If our plan sounds good to you, please help kickstart it with a tax-deductible donation today.

Thanks for reading—whether or not you can pitch in today, or ever, I'm glad you're with us.

Signed by Clara Jeffery

Clara Jeffery, Editor-in-Chief

payment methods

We Recommend