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Citizens for Tax Justice has joined with Good Jobs First to follow up the recent report that found 30 Fortune 500 companies had paid a negative federal income tax rate over three years, looking at one of those companies in depth. From 2008 to 2010, Verizon paid an effective federal income tax rate of -2.9 percent; that meant that instead of the $11.4 billion the corporation would have paid at the statutory rate of 35 percent, "it got $951 million in rebates, putting its federal tax subsidies at $12.3 billion."

It wasn't just federal income taxes that Verizon dodged:

At the state level, Verizon should have paid about $2.3 billion in corporate income taxes during the period but it handed over only $866 million. Its aggregate state rate was only 2.6 percent, far below the weighted state average rate of 6.8 percent. This gave it state tax subsidies of about $1.4 billion.

But that's not all. Verizon has received at least $180.8 million in state and local subsidies in recent years, extracted in exchange for locating facilities and supposedly creating jobs—mostly low-wage ones—in the communities.

None of that, from the -2.9 percent federal income tax rate, the 2.6 percent state income tax rate, the $180.8 million in state and local subsidies, and several other large tax breaks Verizon has gotten, has been going reinvested in workers or the communities they live in:

Verizon has been eliminating jobs and investing less. During the past three years, the total number of employees at Verizon has fallen by more than 40,000 and the company’s capital expenditures have declined by $1 billion. Nor did these subsidies lead to higher compensation for Verizon’s employees—the company is demanding more than $1 billion in wage and benefit concessions from its 45,000 union-represented workers.

Originally posted to Daily Kos Labor on Wed Nov 16, 2011 at 01:02 PM PST.

Also republished by ClassWarfare Newsletter: WallStreet VS Working Class Global Occupy movement and Daily Kos.

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Comment Preferences

  •  For anyone who wonders why (26+ / 0-)

    things like the OWS movement is happening, point them to stories like this.  If they don't find anything wrong with it, then they are part of the problem.

    •  For anyone who wonders whether American Consumers (4+ / 0-)

      will be able to "carry us all" as highlighted in a linked article at Naked Capitalism, the answer is likely to be:

      Not unless American companies stop laying them off and cutting their income (ie reducing their purchasing power in their other role as 'American Consumers'.)

      Too few commentators and damned few politicians are calling out American "job creators" for undermining our American recovery by hoarding the profits at the expense of the middle class who would actually spend that money back into the economy.  

      Roubini had it right.

      ...Roubini: Well businesses are not doing anything.  They're not actually helping.  All this (tail?) risk made them more nervous.  There's an option value in waiting.  They claim they're doing cutbacks because there's excess capacity and not hiring workers because there's not enough final demand, but there's a paradox and a Catch-22.  

      If you're not hiring workers, there's not enough labor income, there's not enough consumer confidence, there's not enough consumption, there's not enough final demand. In the last two or three years, we've actually had a worsening because we've had a massive redistribution of income from labor to capital, from wages to profits, and the inequality of income and wealth has increased and the marginal propensity to spend of a household is greater than the marginal propensity to spend of a firm because they have a higher marginal propensity to save, firms compared to households.  So that the redistribution of income and wealth makes the problem of excessive lack of aggregate demand even worse.

      Karl Marx had it right.  At some point, Capitalism can self-destroy itself because you cannot keep on shifting income from labor to Capital without not having an excess capacity and a lack of aggregate demand.  That's what has happening.  

      We thought that markets worked.  They're not working.  And what's individually rational - every firm, to survive and thrive, and they're slashing labor costs even more.  My labor costs are someone's less income and consumption.  That's why it's a self-destructive process.


      Someone in a very expensive suit is at the front door and says he wants to foreclose on our democracy. Where should I tell him he can put his robosigning pen?

      by Into The Woods on Wed Nov 16, 2011 at 09:42:08 PM PST

      [ Parent ]

    •  Sen. Kay Hagen Dem. NC (0+ / 0-)

      has teamed up with I Know How To Win A War McCain for the great give them more money because taxpayers have to much left tax holiday.. Please flood her box with this post at


       Laura, thanks for doing what my Senator or her staff should be doing***

  •  Stinkin' crooks. I sold my stock in Verizon this (2+ / 0-)
    Recommended by:
    ocular sinister, luckylizard

    month. Good riddance.

    I still have a phone contract with them, but I don't know that any of their competitors are any better.

    Lea: "You're not going to fly into an asteroid field, are you?" Han Solo: "They'd be crazy to follow us, wouldn't they?"

    by Kimball Cross on Wed Nov 16, 2011 at 01:06:26 PM PST

  •  If you have a Cell Phone (6+ / 0-)

    Try to look into a Tracfone.  

    $20 for a phone.  And $199.99 for 1500 minutes.  

    I hardly use mine at all and my costs come out to $5 monthly.  

  •  and we all wonder why we are in (1+ / 0-)
    Recommended by:

    this kind of financial mess....


    The goal is not to bring your adversaries to their knees but to their senses. -- Mahatma Gandhi

    by Mindmover on Wed Nov 16, 2011 at 01:28:51 PM PST

  •  Greed writ large: Corporations are persons; (5+ / 0-)

    but persons are now only worth 3/5 of 1% of 1% of a corporation, in our polity.

    Verizon is about as bad as they get (well, except maybe for the Gas Companies and Blackwater/Xe).

    Verizon have contempt for their customers. I had problems with my bills, and spent six hours, online and on the phone, trying to sort them out. Everyone gave me different stories. They had three accounts in my name, but no one person could see all three accounts, or begin to explain the mess they'd made of them.

    I paid two bills. Ever since, I've been getting letters trying to claim more from me, plus interest and fees. I've stopped caring. Why should I give them better, more honest service than they ever gave me?

    "Every man has a right to utter what he thinks truth" Samuel Johnson

    by Brecht on Wed Nov 16, 2011 at 02:49:13 PM PST

  •  Move your phone number! I ditched ATT after (3+ / 0-)
    Recommended by:
    happymisanthropy, DWG, murrayewv

    their support of effing Rick Perry.

  •  Ever Feel Like We're Living on a Plantation? (4+ / 0-)

    Virtually enslaved to our Corporate overlords, when do we finally seize our government back and what exactly does that entail?

    Whereas the Occupy movement has been great for getting these sorry facts into the popular discussion, it's not going to be enough to get the Corporate Oligarchs to yield a goddam inch. They don't want fair or even unfair, they want us and everything we own, they want it all and as long as they control our governing bodies they will eventually get it.

    So, what to do? It's close to time to show the bastards where the power really lies- a 99er General Strike would do that and do it fast.

    I never tire of posting this nearly 50 year old "call to arms", it's as true now as it was then, perhaps exponentially more so now.

    I've labored long and hard for bread, For honor, and for riches, But on my corns too long you've tread, You fine-haired sons of bitches. —Black Bart, The PO8 - 1877

    by Dave925 on Wed Nov 16, 2011 at 08:24:16 PM PST

    •  we also have stop buying their stuff (1+ / 0-)
      Recommended by:
      Hear Our Voices

      and tell everyone why. It's working with banks and credit unions. Tie the pols to the legislation, and the campaign contributions that made it so they paid no taxes,  said  in the same breath as the name of the company. How we pay a fortune for crappy service, when in Korea it's  cheaper and 10 time faster. How they use the millions in tax money they save for corporate bloat and waste. The answer to how we need to cut corporate taxes to spur job growth should always be "What jobs? What about Verizon? It made X billion and paid no taxes, laid off workers and forced givebacks while making record profits." Every time they say cut corporate taxes we say Verizon, and remind them we have to pay more taxes so they don't have to.

  •  Do you take any deductions? (0+ / 0-)

    Call out Congress on this.  

    I don't see anyone introducing a bill to change this, do you?

    Until they do, don't blame Verizon unless you voluntarily pay more in taxes than you are required to under the law.

    If the foundations be destroyed, what can the righteous do? - Psalms 11:3

    by SpamNunn on Wed Nov 16, 2011 at 08:29:27 PM PST

    •  Do you lobby Congress (3+ / 0-)
      Recommended by:
      SpamNunn, happymisanthropy, DWG

      to write in a bunch of tax breaks for you?

      27, white male, TX-26 (current), TN-07 (originally), liberal-leaning independent

      by TDDVandy on Wed Nov 16, 2011 at 08:35:45 PM PST

      [ Parent ]

      •  Yes, I do. (0+ / 0-)

        Don't you?  

        I'd hate to think that all of those political contributions I make are going to waste.

        If the foundations be destroyed, what can the righteous do? - Psalms 11:3

        by SpamNunn on Wed Nov 16, 2011 at 08:45:46 PM PST

        [ Parent ]

      •  Well... (0+ / 0-)

        ...sometimes other parties do it (allegedly) on your behalf.

        For example, one of the greatest boondoggles in taxation in America survives in part because of vested interests (the real estate industry)  lobbying on the consumers' "behalf" to subsidize home "ownership" via two giant tax loopholes.

        First is the deduction for interest on a mortgage. This is a lingering remnant of the deduction for all consumer interest since the early 1900's but stripped down to the special case of only mortgage interest in 1986.

        Second is the exemption of capital gains on the sale of one's residence up to $500,000 per couple. Ironically that's over twice the median house price in the US so giant gains can be completely exempt from taxation forever. This gaping loophole was introduced in 1997 (replacing a much more reasonable "one time deduction" for gains for older folks and the ability to carry gains and basis tax-free across qualifying home sales).

        Most people seem to support these loopholes (esp. the mortgage interest deduction) because they thought they benefited from them. They are actually wrong in many cases because these loopholes helped drive housing prices up making it harder for first time buyers to afford to "buy" a house and also encouraged over-leveraging. These loopholes also contributed to the housing bubble which certainly hasn't helped most people much.

    •  I don't (1+ / 0-)
      Recommended by:
      Orman West

      bust unions, either.

      Passengers: Feel free to rearrange the deck chairs, but please remember that the bridge is off limits.

      by happymisanthropy on Wed Nov 16, 2011 at 08:46:25 PM PST

      [ Parent ]

  •  I think this sums it up well (5+ / 0-)

    Verizon Paid More in CEO Compensation Than Federal Taxes

    For reference his compensation has risen by eight million in the past 10 years, while Verizon slashed pensions, benefits, wages and jobs.

  •  I wish (1+ / 0-)
    Recommended by:

    there were local community wireless providers to move my cell phone plan to.

    27, white male, TX-26 (current), TN-07 (originally), liberal-leaning independent

    by TDDVandy on Wed Nov 16, 2011 at 08:32:08 PM PST

  •  New ad: Can I screw you now? (6+ / 0-)

    "Mr. President, I'm not saying we wouldn't get our hair mussed." General Buck Turgidson

    by muledriver on Wed Nov 16, 2011 at 08:46:21 PM PST

  •  And the sad thing is, this situation is more the (2+ / 0-)
    Recommended by:
    happymisanthropy, Into The Woods

    norm than the exception.

    “when Democrats don’t vote, Democrats don’t win.” Alan Grayson

    by ahumbleopinion on Wed Nov 16, 2011 at 08:49:30 PM PST

  •  Verizon: When Even Too Much is Never Enough (1+ / 0-)
    Recommended by:

    This is a poster-child for companies that believe in the Faux Market, where the best return on investment is found in political contributions and lobbying.

    Given that 1/3 of 1% of American adults provide over 2/3 of the campaign contributions(to candidates or PACs), this kind of concentrated expenditure is an almost certain way to 'invest' to feed the greed.  

    Someone in a very expensive suit is at the front door and says he wants to foreclose on our democracy. Where should I tell him he can put his robosigning pen?

    by Into The Woods on Wed Nov 16, 2011 at 09:28:22 PM PST

  •  I have concluded... (0+ / 0-)

    ...that Richard Ayoade needs to be the next Dr. Who.


    "And, spite of pride in erring reason’s spite, One truth is clear, whatever is, is right." Alexander Pope -Essay on Man

    by DawnG on Wed Nov 16, 2011 at 10:15:25 PM PST

  •  Retired Philly Police Captain Ray Lewis Joins OWS (0+ / 0-)

    "I wish I could tell you, in the midst of all of this, that President Obama was waging the kind of fight against these draconian Republican proposals that the American people would like to see. He is not." -- Senator Bernie Sanders

    by Sagebrush Bob on Wed Nov 16, 2011 at 11:24:23 PM PST

  •  Yup. (1+ / 0-)
    Recommended by:

    This is what happens when you ask for government to keep interfering in a market.

  •  sigh. (1+ / 0-)
    Recommended by:
    Jim M
    "it got $951 million in rebates,

    One would think that after X months of focus on corporate tax accounting, people wouldn't still be making this mistake of assuming that tax benefit = "rebate received."
    •  These tax issues are really complicated (3+ / 0-)
      Recommended by:
      WillR, cville townie, Jim M

      Here is a link to verizons 2010 tax info

      Here is a link to general deferred taxes

      Here is a link to the reverse morris trust that verizon used to avoid taxes on the sale of assets

      If you sell assets then you obviously should pay taxes. But what if you spin off a portion of your company (i.e. split your company) and the new entity has the same shareholders. That is a spinoff and you shouldnt have to pay any taxes. What if only a portion of the new company is owned by the original owners? Anyway this gets into complex tax law that somewhat is reasonable.

      The greater portion of the tax avoidance is actually deferred tax liabilities. So verizon has 22B in deferred tax liabilities. Because taxes operate on a yearly basis, but companies make investments that span many years the tax laws are designed to help smooth out the tax burden.

      here are some examples of how this can arise:

      Verizon owes 22B in accumulated taxes

      depreciation plays a large role in this. If I pay 20B today to build out infrastructure, the government says I should spread out the cost of that over many years rather than take the benefit all at once. The government may let me take my depreciation at a faster rate than what I actually depreciate in my accounting. This means Im deducting more than what I am actually depreciating on my books. This gap creates a deferred tax liability. I will eventually have to pay those taxes.

      When we say their tax liability was only X% what we are saying is that their  tax was x% of their accrual based accounting

      Ill admit that I dont fully understand all of this, but my main point is that it isnt as nefarious as it sounds on the surface

      One other thing is if a company gets tax rebates, that generally means that they paid taxes in a prior period. Many of these negative taxes just get balanced against the accumulated tax liability.

      •  This is an argument against tax expenditures. (1+ / 0-)
        Recommended by:
        cville townie

        ["Tax expenditures" being preferences - credits, deductions, preferential rates, etc. - in the Federal tax code that forego revenues rather than direct grants in subsidies or other government spending.)

        Corporations abound who now pay less than the statutory 35% - the rate their bought-and-paid-for policy-makers always argue is one of the highest tax rates on the planet. I'd guess these non-payors are just about every business enterprise in the nation.

        So maybe ...

        the best tax reform would be to set an "Effective Minimum Tax", a stiffer alternative minimum tax on corporate enterprises, much like the AMT that for years has deprived middle-class individuals of many of their tax expenditures as their income rises.

        The inevitable compromise that might have to be made to enact such an Effective Minimum Tax for corporations could have the rate top at less than 35%, say at 25% (or 22.5% for whatever year a corporation repatriates all the revenues it's been parking offshore).

        Keeping this simple has two huge values: it could (1) explain the reform to low information voters and (2) sidestep the furor lobbyists would bring to retain their favorite corporate tax tool in other kinds of proposed reform. The EMT could keep their current tools, to be hugged periodically, but would lose their potency as corporate incomes rise, making for real reform and additions to the Federal coffers.

        And if we're really serious about Federal deficits, also enacting a Financial Transactions Tax, a minute percentage on Wall Street transactions, would - together with a corporate EMT - produce substantial debt reduction ... fast and easy. After all, if the US has functionally converted from a manufacturing economy to a financial powerhouse, a minuscule tax on financial industries (which will, for course, be borne by consumers of those services and exotic investment products) would be ideal, far preferable to any broad-based VAT or 9-9-9 "plan."

        Obama and strong Democratic majorities in 2012!

        by TRPChicago on Thu Nov 17, 2011 at 06:33:23 AM PST

        [ Parent ]

  •  Remember When... (0+ / 0-)

    There were no cell phones?  I don't HAVE to have a cell phone.   Fer God's sake, when I was little we had a frikkin party line - we had to share a phone with our neighbors.

    Our contract with Verizon is up in June.  I'm going to drop my cell phone, and we're probably going to drop TV because we rarely watch it anyway.

    The only way we're going to get the attention of all the greedy bastards is to quit giving them money.

  •  No company is the US should ever pay... (1+ / 0-)
    Recommended by:
    The Nose

    a "negative tax."

    I guess even ZERO is too much for some corporations?

    "The right to be heard does not automatically include the right to be taken seriously." -- Hubert H. Humphrey

    by Candide08 on Thu Nov 17, 2011 at 07:17:32 AM PST

  •  I would like to see (0+ / 0-)

    statistics on their supply chain.  What portion, if any, is American made?

    Then get all of this brought up on the floor of the house, and demand that they explain why they hate America.

    I am not religious, and did NOT say I enjoyed sects.

    by trumpeter on Thu Nov 17, 2011 at 10:24:00 AM PST

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