Home » Astroturf »Editorial & Site News »Public Policy & Gov't » Currently Reading:

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.

Search This Site:

Contributions:

Recent Comments:

  • Zach: What are you guys writing to get the credits back? I'm in Gainesville, GA and with the kids watching Sesame Street and Netflix and my design/photograp...
  • Phillip Dampier: I agree. We successfully fought off usage caps with a concentrated campaign directed at both Frontier Communications and Time Warner Cable. Both compa...
  • Phillip Dampier: Just a side note for information purposes: AT&T only enforces its usage caps on DSL customers. To date, I know of no one actually penalized for exceed...
  • Phillip Dampier: As John said, the Xfinity Wi-Fi service does not count towards your cap when someone else is logged into it. Comcast's Network Gateway puts out mu...
  • Tim: I'm aware it's not supposed to count toward the device owner's cap, but it sometimes counts toward the cap for both the signed-in user AND the device ...
  • Paul: I am also a Comcast customer in the Atlanta area of Lawrenceville, about 25 miles from ATL. These data caps are such a nuisance and we usually get hit...
  • John: The Wifi Home Hotspot doesn't count toward the data usage of the customer renting the equipment, but to that of the guest user (they have to sign in t...
  • Glenn Hull: $299.99 per month for 2GB Speed. Thank goodness there are no data caps! Way to innovate Comcast! #comcastcares...
  • AC: I have basic internet with them. I followed instructions for both twitter and Facebook and no response. That of course is what I suspected would happe...
  • Tim: Hi Kelly, I would like to inform you that Comcast has a promotion called "Xfinity WiFi." Supposedly you can deactivate it on their website but the ...
  • AC: My curiosity would be in Russia's actual FTTH compared to the United States actual figures. Since the oligopolies always use the FTTPR numbers as "FT...
  • AC: And I'll believe that when I see it....

Your Account: