Over 110 student body presidents from across the country penned a letter to the Biden administration, urging them to take action on student loan forgiveness to address inequality.
Corporations are skipping out on taxes that would fund public education.
By Paul Buchheit
Corporations have reaped trillion-dollar benefits from 60 years of public education in the U.S., but they’re skipping out on the taxes meant to sustain the educational system. Children suffer from repeated school cutbacks. And parents subsidize the deadbeat corporations through increases in property taxes and sales taxes.
Big Companies Pay about a Third of their Required State Taxes
An earlier report noted that 25 of our nation’s largest corporations paid combined 2013 state taxes at a rate of 2.4%, a little over a third of the average required tax. Many of these companies play one state against another, holding their home states hostage for tax breaks under the threat of bolting to other states.
Without Corporate Taxes, K-12 Public Education Keeps Getting Cut
Overall spending on K-12 public school students fell in 2011 for the first time since the Census Bureau began keeping records over three decades ago. The cuts have continued to the present day, with the majority of states spending less per student than before the 2008 recession.
It’s Getting Worse
Total corporate profits were about $1.8 trillion in 2013 (with other estimates somewhat higher or lower). The $46 billion in total corporate state income tax in 2013, as reported by both Ernst & Young (Table 3-A) and the Census Bureau, amounts to just 2.55% of the $1.8 trillion in corporate profits, a drop from the 3% paid in the five years ending in 2012.
The Worst Offenders
The most recent Pay Up Now analysis for 2014 shows some of the biggest and the worst offenders among U.S. corporations in 2014. Twenty companies with total U.S. profits of over $150 billion paid just 1.4% in state taxes. Some of the lowlights:
—-Three of the largest California companies (Google, Intel, Wells Fargo) paid just 1.4% of their profits in state taxes. That’s less than 1/6 of the required California rate. Apple, which paid about half of its required state taxes in 2014, shamed itself by claiming residency in tax-free Nevada to avoid California’s high rate.
—-Texas has a modest franchise tax instead of a state tax, but two giant firms (Exxon and AT&T) still managed to claim sizable state tax credits. Exxon, which has almost 80% of its productive oil and gas wells in the U.S., declared only 17% of its income here, while using a theoretical tax to account for 83% of its smallish federal income tax bill. On the state side, the company received hundreds of millions in subsidies for its refineries in Louisiana.
—-In Illinois, a state beleaguered by pension woes and the nation’s worst per-student spending cuts in 2011-12, lost nearly a billion dollars in tax revenue to just six companies (Boeing, Archer Daniels, Walgreen’s, Caterpillar, Exelon, Abbott Labs), which paid just 1.9% of their profits in state taxes, about a quarter of the required amount.
—New York’s most notorious tax avoider is Pfizer, which had nearly half of its sales in the U.S. over the past three years, yet claimed $50 billion in foreign profits and losses in the U.S..
How Taxpayers Subsidize the Tax Avoiders
All of our technology, securities trading, medicine, infrastructure, and national security have their roots in public research and development. The majority (57 percent) of basic research, the essential startup work for products that don’t yet yield profits, is paid for by our tax dollars.
But big business apparently views its tax responsibility as a burden to be avoided at the expense of the rest of us.
Paul Buchheit is a writer for progressive publications and the founder and developer of social justice and educational web sites, among them UsAgainstGreed.org, PayUpNow.org, and RappingHistory.org.