Daily Kos: That Sucking Sound? It’s The 73 Billion-Dollar Corporate Robbery of The States
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THU MAR 20, 2014 AT 11:12 AM PDT
What I really like about corporate skullduggery is that at least it’s usually done with big numbers, as in billions of dollars. Nothing on the cheap (except, of course, when it comes to paying workers). In another installment of “how can we fill our coffers, pay our CEO millions of dollars and fleece the public” comes today’s news: Corporate-based America is robbing the states of billions of dollars by dodging taxes.
Once again, Citizens for Tax Justice (now there’s an organization that deserves the Medal of Freedom) has another in-depth study, which is quite detailed but I’ll summarize it here:
* 90 companies paid no state income tax at all in at least one year, and 38 companies avoided taxes in two or more years.
* 10 companies, including Boeing, Merck, Rockwell Automation, paid no state income tax at all over the five-year period covered by the study.
* The average weighted state corporate income tax rate is 6.25 percent, but the 269 companies paid an average rate of just 3.06 percent.
* The companies examined collectively avoided paying $73.1 billion in state corporate income tax.[emphasis added]
And the kicker:
In 2012 alone, 25 companies paid no state income tax. Another 127 of the companies paid less than half the weighted-average statutory state corporate tax rate that year, meaning that more than half of the companies in our sample paid less than half the average legal state tax rate in that year
How to stop it? One key step:
The single most important corporate tax reform available to states is to adopt a practice used by 24 states called “combined reporting,” which effectively treats a parent and its subsidiaries as one corporation for state tax purposes. Combined reporting eliminates most of the tax benefits of shifting profits into Delaware or Nevada by adding them back to the profits of the corporation that is taxable in the state and then taxing a share of the combined profit.
The bottom line:
The data in this report show in stark terms just how successful large, multistate and multinational corporations have become at shirking their tax responsibilities to state and local governments. They have been abetted in this effort by America’s major accounting firms, have used heavy lobbying and even threats to extract further tax breaks, and have often persuaded state elected officials to become their facilitators, too. As a result, individual taxpayers and purely in-state (usually smaller) businesses are paying a heavy price, in the form of higher taxes, reduced public services and unfair competition .
What is particularly galling is that many of these corporate “leaders” (it’s not leadership to essentially argue for your self-interested greed) are the very ones arguing for state budget cuts, cuts in pensions, and vociferously opposing the quite puny proposal to raise the minimum wage to $10.10.
By dodging a fair share in taxes, the same corporations have created the very crisis of shortfalls in state budgets (and, on the pension side, in particular, the finance-industry driven financial crisis caused hundreds of billions of dollars in pension losses).
Scum.
12:04 PM PT: Several people have commented quite appropriately about the race to the bottom in the competition between states and cities for jobs, a race to the bottom fanned by the overpaid CEOs whose one goal is to boost the share price of the company to enhance their own wealth…a great organization on this whole topic is Good Jobs First http://www.goodjobsfirst.org/ Check them out.