Educators, allies tell lawmakers: Close corporate tax loopholes

NOTE: This is the third installment in our series on how corporate tax loopholes undermine the middle class—and what we can do about it. You can read the first article in the series here, and read the second article here. Sign our petition asking lawmakers to stand with the middle class by closing corporate tax loopholes.

By Amanda Litvinov

Joyce Huggans, a retired teacher from Nebraska, knows that it’s bad policy to let big corporations off the hook from paying their fair share in taxes. It’s not good for schools, students or the middle class—after all, it’s not as if those corporate subsidies mean greater wages for workers. That’s why she was alarmed when Governor Dave Heineman released a budget proposal that included a significant tax rate reduction for businesses earning more than $100,000 in net profits.

The governor’s plan would have created a loss of $326 million in state revenue over three years, explained Jerry Hoffman, a legislative expert at the Nebraska State Education Association (NSEA). When NSEA called upon its members to protest by writing emails to their representatives and members of the education and revenue committees, Huggans hunkered down at her keyboard.

“I was really blunt and said it seemed to me the governor was trying to pave his way to a federal office by doing all of these things for all of these big businesses,” said Huggans, who taught business to high school students for 30 years. The governor would be out of office by the time Nebraskans realized the greatest deficits caused by his tax, Huggans explained.

Like our slideshow? Share on social media or embed it in your blog!

There’s no question that restoring balance to federal corporate tax laws is essential to solving the problem state-by-state—and you can help us demand bring attention to the national issues by signing our petition asking elected officials to stand up for the middle class. In the meantime, state education associations are among the organizations taking the lead in putting a stop to new handouts for big corporations, and closing loopholes that already exist. Here are just a few of those recent fights:

  • The Alabama Education Association continues its crusade to close corporate tax loopholes that would bring the state more than $300 million new dollars in revenue. In 2011, the Association’s work helped secure the governor’s pledge to close the tax loophole that allows multi-state corporations to deduct their federal taxes paid from their taxes due to the state of Alabama.
  • The Michigan Education Association commissioned research that uncovered just how big the business tax loopholes were. Their work resulted in the passage of a sunshine law; new limits on tax credits; and the recall of the chair of house education committee, who was pushing for laws offering $1.8 billion in business tax cuts that would be offset by cuts to education funding and taxing some retirement income.
  •  The Mississippi Association of Educators’ work with the state department of revenue uncovered that 103 of the largest 150 corporations doing business there pay no income tax. HB 970, which would have closed about $30 million in corporate loopholes, received overwhelming support in committee, it failed to make it to the floor following the Chamber of Commerce’s scare campaign promising the bill would drive business away and raise costs for consumers.

One thing the states that have made the most progress in restoring tax fairness have in common is member participation.

“Our members did a great job telling their senators what was wrong with the governor’s original tax plan,” said Nebraska’s Jerry Hoffman. “They wrote personal emails telling stories from their classrooms, their school districts and their communities.”

Robert McIntyre, director of the research and advocacy organization Citizens for Tax Justice, says educators, parents and other community members concerned about public education should realize their personal insights have just as much currency with their representatives in Washington, too.

“Those elected leaders need to hear from people back in their states and congressional districts that the people know it’s not a good idea to keep the corporate tax system that doesn’t do the job we need it to do,” said McIntyre. “Because otherwise the only voices those representatives hear are those of the corporate tax lobbyists.”

  • Sign our petition asking federal lawmakers to stand with students and the middle class by closing corporate tax loopholes.
  • Like our slideshow? You can embed it in your blog or share it with your networks.

Reader Comments

  1. Nothing against corporate America…we need responsible businesses. However, there need to be checks and balances to prevent corruption and fraud. Hopefully, business can thrive where there is a strong middle class.

Leave a Reply

Your email address will not be published. Required fields are marked *