New Report: Biggest Corporate Tax Dodgers Also Shed Local Jobs
For immediate release, Dec. 5, 2013
CONTACT: Nathan Proctor, (617) 747-4429
BOSTON, MA – As Congress gearing up for the next budget deadline, many are raising the possibility of corporate tax reform to help balance the books. But corporations and their lobbyists are falsely warning that tax reform could lead to job loss.
Massachusetts Fair Share is among those calling for an end to the corporate tax loopholes that allow corporations to stash profits offshore to avoid paying taxes on those profits. Corporate tax loopholes cost the American taxpayer more than $100 billion annually in lost revenue. And, according to a new report authored by the Center for Effective Government and released by Massachusetts Fair Share, the corporations who abuse these loopholes do not add more jobs than corporations who pay more.
"Already, these tax loopholes are fundamentally unfair -- they reward huge multinational corporations and put small business at a disadvantage,” said Nathan Proctor, State Director of Massachusetts Fair Share. “Now we learn that not only are they skipping the check, the worst offending companies are laying off more workers. Why are we as taxpayers subsidizing that?”
The report, The Corporate Tax Rate Debate: Lower Taxes on Corporate Profits Not Linked to Job Creation, examined the tax rates paid and jobs created by 60 large, profitable corporations. The companies were not cherry-picked. Rather, they came from a larger group of 280 corporations and CEG examined the 30 companies that paid the highest effective tax rate and the 30 companies that paid the lowest effective tax rate.
The analysis found that the 30 companies that paid the highest tax rates added nearly 200,000 jobs over a five-year period. Those companies that paid little or no taxes (and in many cases received large refunds) shed about 51,000 jobs during that same period.
"The notion that reducing the taxes corporations pay on their profits will create new jobs in the U.S. is just not borne out by the evidence we examined," said Katherine McFate, President and CEO of the Center for Effective Government and one of the co-authors of the report.
Companies examined include many operating in Massachusetts, including Verizon and General Electric which have laid off workers in the Bay State over the last few years.
"A tax loophole should at least encourage creating good Massachusetts jobs – American jobs. Verizon should not be allowed ANY tax loopholes while they outsource jobs overseas," said Boston IBEW Local 2222 Business Manager Myles Calvey. Calvey represents more than 6,800 Verizon employees in Massachusetts and Rhode Island.
“America should work for everyone. We believe our budget should reflect that value: Everyone should get a fair shot at a decent job and a secure future, and everyone should pay their fair share. No one should be allowed to cheat the system. We should eliminate these counter-productive tax breaks and use that money to rebuild the economy and invest in education,” concluded Proctor.