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:

  • Ernesto Honez: Was that a confirmed and signed "contract"? Was it verbal? Was it sent out in a letter as bulk mailing, or with a first class stamp? Was it's delivery...
  • Matt: I just got off the phone with AT&T. I called saying that I found a promotion through Time Warner for $34.99 for 15 mbps and I am trying to cut dow...
  • Phillip Dampier: It first went to a handful of test markets in upstate New York (not Rochester) and then has been redesignated as a feature enhancement in Maxx markets...
  • Steve Rea: Any idea when the new DVR is coming to Rochester? I remember a story you posed over 2 years ago from the CEO of TWC at the time! saying it was comi...
  • AustinTX: James, my suggestion would be to switch to TWC rental modems, and fry 2-3 of them over the course of several weeks by running 24v AC into the coax con...
  • Dragos: For 1Gbps in Romania we pay around 12 EUR (VAT included - 24%). http://www.rcs-rds.ro/internet-digi-net/fiberlink?t=internet-fix&pachet=digi_ne...
  • James R Curry: Hey, Phillip - While not related to Comcast directly -- I rent my modem from TWC, and while I'd rather buy one outright, there's one big factor ...
  • Sean: I believe that there are issues intermixing DOSCIS 2/3 modems on a node. It's been about 5 years since I've worked with a CMTS so I am by no means an...
  • AustinTX: Yep, this isn't about "your old modem isn't capable of the wonderful new speeds we're providing to your service tier", it's about "we know your custom...
  • MJ Lee: This is strange. I did get a letter from Time Warner saying my apartment was qualified for Time Warner Cable Maxx, but when I applied for it, I got an...
  • Tim: You know this is overstating the case ... unlimited data adsl2 plans are available from $60 in Australia. Average price is about $90...
  • Phillip Dampier: I think 10/Gbps is available in the USA as well, on an obscenely expensive metro Ethernet or commercial fiber link provisioned by a telecom company. ...

Your Account: