Nashville Scene: Memphis Multinational Company Skirts Taxes
media mentionPosted by Jonathan Meador on Wed, Dec 7, 2011 at 12:44 PM
Memphis-based International Pulp and Paper paid no state income taxes in 2008 and 2010, according to data released today by the nonprofit Citizens for Tax Justice.
The data, included in the CTJ’s “Corporate Tax Dodging in the Fifty States, 2008-2010″ report, culled tax information from 265 Fortune 500 companies, of which 68 paid no income taxes in at least one year out of the last three. The report reveals that International Pulp and Paper — unarguably the world’s biggest pulp and paper manufacturer and largest producer of disposable paper cups and plastic lids — netted $551 million in profits during the years it paid an effective -3.8 percent tax rate.
From the CTJ:
“Our report shows these corporations raked in a combined $1.33 trillion in profits in the last three years, and far too many have managed to shelter half or more of their profits from state taxes,” said Matthew Gardner, Executive Director at the Institute on Taxation and Economic Policy and the report’s co-author. “They’re so busy avoiding taxes, it’s no wonder they’re not creating any new jobs.
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“Corporate Tax Dodging in the Fifty States, 2008-2010” concludes that these 265 corporations cost states $42.7 billion in lost revenues in the last three years, and Gardner identifies three chief causes for state corporate tax revenues steadily declining for two decades. First, state lawmakers continue to enact tax subsidies requested by corporations, most of which don’t produce the promised economic results. Second, federal tax breaks enacted in the past decade further reduce state corporate income tax revenues since states generally accept corporations’ federal tax numbers. Third, said Gardner, “and most insidious, is that multi-state corporations themselves devote their money and legal firepower to coming up with tax avoidance schemes.”
To put it in perspective, Tennesseans pay the highest sales taxes and the third-highest food taxes in the country, whereas one of its largest companies gets paid simply to exist. It’s the kind of thing that just might make people take to the streets in protest…