Boston Herald: Study: Verizon pays no taxes
media mentionBy Thomas Grillo
Sunday, November 6, 2011
The union that represents Bay State telephone workers is blasting Verizon following a report that said the telecommunications giant has not paid a penny in taxes for the past three years.
“We wouldn’t mind if Verizon wasn’t paying taxes if they used the money saved to invest in American jobs,” said Myles Calvey, business manager of the International Brotherhood of Electrical Workers union Local 2222. “Instead, while they dodge paying taxes in the U.S., they’re eliminating jobs and opening centers in Mexico and India. They wonder why the union hates them.”
The study, “Corporate Taxpayers and Corporate Tax Dodgers, 2008-2010,” by Citizens for Tax Justice and the Institute on Taxation and Economic Policy, a pair of nonprofits that scrutinize tax policy, examined financial reports from 280 corporations from the Fortune 500 list that were profitable from 2008 thorugh 2010.
Wells Fargo topped the list of U.S. corporations receiving the most in tax subsidies, getting nearly $18 billion in tax breaks from the U.S. Treasury over the last three years.
Pepco Holdings had the lowest effective tax rate of all the companies in the study, at minus 57.6 percent over the three-year period.
Among the other findings, of America’s most profitable companies, 78 of them paid no federal income tax in at least one of the last three years. Of that number, 30 companies — including Verizon — paid nothing in taxes over the period.
But Verizon is fighting back, alleging the figures used in the study are incorrect and charging the “union-orchestrated report is deceptive and politically motivated.”
“Verizon fully complies with all tax laws and pays its fair share of taxes,” said Phil Santoro, a Verizon spokesman in a statement.
He said Verizon paid $1.79 billion in taxes over 2008-2010, and reported earnings of $5.25 billion over this same period. In addition, Verizon has annually invested $16.5 billion in technology infrastructure, Santoro added.
“This investment has created and sustained jobs, so U.S. economic development policy allows for the payment of some taxes to be deferred,” Santoro said. He added that the study’s authors treat deferred taxes as non-existent and fail to account for the $1.79 billion in taxes Verizon paid out over the past three years despite deferrals, and it “incorrectly” calculates earnings for Verizon to include income belonging to Vodafone, Verizon’s partner in Verizon Wireless.
The report found that the average effective tax rate for all 280 companies in the study over the three-year period was 18.5 percent, significantly less than the statutory rate of 35 percent.
Among Massachusetts-based companies, researchers found that BJ’s Wholesale Club and the TJX Cos. paid an average tax rate over three years of 27 percent, while Staples paid 31 percent and Raytheon paid 13.7 percent.