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Cash Rich AT&T, Verizon, Time Warner Cable Form Astroturf Group to Demand Major Tax Cuts

Phillip Dampier September 27, 2011 Astroturf, Editorial & Site News, Public Policy & Gov't No Comments

AT&T, Verizon, Time Warner Cable, and nine other giant corporations selling cigarettes, shoes, shipping services, and jet aircraft have formed a new group demanding major cuts in the corporate tax rate that would allow some of them to repatriate billions in cash reserves stuffed in overseas banks to dodge U.S. taxes.

RATE — the Reducing America’s Taxes Equitably Coalition, says cutting the corporate tax rate is key to increased spending of accumulated corporate dollars in the United States.

“In a global economy where capital is highly mobile, it is simply harder to compete from America,” the companies’ executives wrote in a letter. “A lower corporate tax rate will boost investment in the U.S., bringing more American jobs, innovation and growth.”

But many of these corporations already pay less taxes than you do as a percentage of income.  Take Verizon, which shovels substantial profits through its British wireless partner Vodafone through Luxembourg, at an effective tax rate of around 10%.

Forbes reports last year Verizon had sales of $108 billion.  It’s pretax income was $11.8 billion.  The company paid just $1.2 billion in income taxes thanks to its $42 billion wireless joint venture with Vodafone, which Forbes reports “draws off much of Verizon’s income.”  But that is hardly a bad thing for Verizon.  Its effective tax rate: 10.5%.  Most middle class Americans pay twice or more that rate.  Verizon itself was surprised it only paid that much, because it ended up getting a federal tax refund for an overpayment amounting to $705 million.

In 2010, AT&T got hit harder, but still managed to eke out a winning year for shareholders.  AT&T enjoyed sales of $123 billion.  Its pretax income: $19 billion.  The company ended up paying $6.2 billion in income taxes for an effective tax rate of 32.4%.  But their executives got the benefit of every tax loophole available for their personal tax returns, made possible by AT&T’s generous subsidy of up to $14,000 a year for each executive officer to hire the best tax accountants around.

American companies already pay the second lowest taxes in the developed world, once all of the loopholes and deductions in the corporate tax code are accounted for. American corporations are sitting on record amounts of cash, so its unclear why more cash (in the form of tax breaks) would lead to more hiring, unless it involves adding more Washington, D.C. lobbyists, of course.

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  • jdhdbsb: Post this on reddit in as many subreddits as you can, post on Facebook, Twitter, and whatever else you can. Will get more attention this way....
  • Howie: I think Verizon will eventually get out of the landline business including dropping Fios and will become a wireless only company. It's just a matter ...
  • Joe V: I ask all of you to sign this petition regarding broadband in the United States. Most people are not aware that AT&T and Verizon want to eliminate...
  • Aaron near Rochester: HAhaha! Do you honestly think Verizon will give something like that out for free forever? It will most likely be limited severely by speed throttles...
  • Joe V: Please sign the petition to bring sonic.net to Pacifica California http://petitions.moveon.org/sign/please-bring-sonicnet?source=c.em&r_by=4516...
  • paul: By this time next year, no one will need vzw in NYC. Their deployment of free wifi through out the city will take the industry by storm. Why pay for s...
  • jdhdbsb: If they support it its obviously against what the consumers want. Would like to see this bill though just to count the loop holes....
  • Scott: I don't think they care much anymore. But I guess since charter bought att broadband in at louis they don't care if they retain customers in St. Loui...
  • Al: Called AT&T today at the number listed on the article. I said I wanted to cancel service bc my cable provider was giving me a better deal. I to...
  • Ralph Chastain: Sounds like companies are digging there own grave and making Title 2 a result of it....
  • jdhdbsb: Makes me think that they are trying to delay it so everyone forgets so they can approve the Anti-Consumer merger....
  • Joshua Nightingale: I think a lawsuit is what it will take to get Frontier in line. I have been a customer of Frontiers for over 6 years now in Hampshire county, WV. We e...

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