Posted In: ALEC, Education Funding, Kids Not Cuts, Uncategorized

Students pay hefty price for corporate tax breaks

Tags: , , ,

By Amanda Litvinov

A comprehensive new study shows some of the nation’s most successful businesses paid little or no taxes between 2008 and 2012.

Take Action ›

Tell Congress to close corporate tax loopholes and fund schools instead! SIGN THE PETITION›

Tax handouts to the 288 Fortune 500 companies that were profitable each of those five years cost the nation $362 billion, according to the study by Citizens for Tax Justice and the Institute on Taxation and Economic Policy.

Corporate tax subsidies are part of the reason there is never enough money to pay for critical programs and services that benefit us all–things like universal early childhood education, grants for all hard-working students to access higher education, and full funding of the Individuals with Disabilities Education Act.

Because state corporate income taxes are typically based on federal taxable income, state revenues suffer in turn. And that results in cuts to state education budgets that jam students into larger classes with fewer resources and supports, like classroom aides.

For decades, corporate interest groups like the American Legislative Exchange Council (ALEC) have worked to stack the deck–in this case the tax code– in favor of the nation’s richest corporations and CEOs at the expense of the middle class. But these top-grossing companies still aren’t satisfied.

“Corporate lobbyists incessantly claim that our corporate tax rate is too high, and that it’s not ‘competitive’ with the rest of the world,” said Robert McIntyre, director of Citizens for Tax Justice and lead author of the report.

“Most of the biggest companies aren’t paying anywhere near 35 percent of their profits in taxes and far too many aren’t paying U.S. taxes at all.”

Here are other jaw-dropping facts from the report:

  • While the federal corporate tax rate is 35 percent, the 288 corporations in the study on average paid barely more than half that amount: 19.4 percent over the 2008-12 period.
  • Many companies paid far less, including 26 that paid nothing at all over the entire five-year period.
  • Most everyday Americans pay more in federal income taxes than General Electric, Boeing, Verizon, Pepco, Priceline, Duke Energy and 20 other big corporations put together.

During roughly the same period in response to the ailing economy, Congress cut $1.5 trillion to services including education, veteran’s benefits and transportation in 2011, and the across-the-board sequester cuts that went into effect in 2013 drained another $3 billion from federal education programs.

Students are relying on us to speak up for them. Sign our petition to tell lawmakers to close these egregious corporate tax loopholes and do right by middle class families.

 

Reader Comments

  1. Kerry Hyman

    Those who are benefitting from, or in collusion with the corporatists will point to the USA corporate marginal effective tax rate set at 35-39%, among the world’s highest. But without exception will avoid mention that because of the myriad of deductions, credits, write-offs, subsidies and other loopholes in our corporate tax code, the after tax effective rate is between 8-13%. Some corporations that earn $$$multi-BILLION per quarter (mostly garnered from the USA consumer market), pay zero in taxes and some get a $3 BILLION rebate check from the USA tax payer (Google 26 Major Corporations pay no tax, or GE files 57,000 pages of tax exemptions…, or Large companies find ways to pay zero tax…). Then park their $$$10s of Billions in clear profit in offshore tax havens, while America the Beautiful, the most sophisticated, expensive nation in the world, goes broke trying to accommodate them.
    We need a level playing field where everyone puts their shoulder to the wheel. These “multinationals” have been milking this turkey for 30 years, Meanwhile Red China, (whose workforce ($1.36/hr. avg. wage some work for 30 cents/hr.) and scorched earth regulations, pollution, etc. policies) our corporatists are only too eager to exploit, bides its time, giving the US enough rope to hang herself, and waits for the GREED of the corporatist and financiers that knows no bounds to destroy them fiscally. Disgusting!

    Reply
  2. Richard

    To make the lost tax revenue situation even more egregious, companies hold states hostage by threatening to leave to another state if they’re denied tax rebate incentives. The real tragedy, the core issue, is that such bribery works: either the state gives in, costing it sorely needed revenue or the demand is not met and the company does indeed leave for a state that will play ball.

    Reply
  3. candace kreitlow

    This NONSENSE must stop!

    Reply

Reader Comments

Learn More to Get Involved