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State, Cities Urged to Bar All Taxpayer Purchases From Chrysler, GM, Other Tax Dodgers While They Refuse to Pay Fair Share

The state’s award of a contract for up to 1,900 Ford vehicles for the California Highway Patrol and other state agencies is a snub to GM and Chrysler, which eagerly sought the prestigious contract.

Consumer Watchdog applauded the tentative award, noting that of the Big 3 U.S. automakers, only Ford is not in a coalition battling to keep a California tax loophole that benefits large out-of-state corporations to the tune of at least $1 billion a year.

The nonprofit, nonpartisan Consumer Watchdog calls on the state and major cities, which it will be contacting, to bar all non-safety-related purchases of Chrysler and GM products until they cease their campaign and pledge willingness to pay the same tax rate that in-state corporations pay.

“Taxpayers shouldn’t be paying millions to automakers that are happy to starve California schools, police departments and disabled people of funding,” said Judy Dugan, research director for Consumer Watchdog. “What’s good for the CHP should be fine for other police departments and government agencies.”

Even with substantial state discounts, the contract for up to 1,800 Taurus-based police patrol cars and 100 Explorer-based police utility vehicles would likely be worth more than $50 million over time. Dealer prices listed online for the civilian models of the patrol car range from about $30,000 to $32,500, without costly additions like bulletproof doors.

The state is sharply cutting back its civilian auto fleet and the CHP has scaled back as well, but wear and tear force the CHP and other public safety agencies to replace vehicles at about 100,000 miles.

The state’s current tax loophole allows many out-of state companies with major sales in California to pay a lower tax rate than in-state companies, depriving the state of $1 billion or more a year, according to the state legislative analyst. Closing the loophole would help restore essential services axed in the current budget crisis, said Consumer Watchdog.

Two other major corporations, Kimberly-Clark (Scott, Kleenex, Huggies products) and International Paper have joined GM and Chrysler in the deceptively titled “California Employers Against Higher Taxes.”

Chrysler more than doubled its state lobbying expenses in the first quarter of this year, to $32,500, as it added two corporate tax reform bills, AB1500 and AB1501, to its lobbying list reported to the Secretary of State.  The larger General Motors spent more than $86,000 on state lobbying in the first quarter, and added the same legislation to its lobbying list. If a separately proposed ballot initiative to close the tax loophole qualifies for the ballot, the four companies are expected to up the ante on spending.

“The state and cities of California owe taxpayers the respect of shunning companies that are driving the state further into a hole of debt,” said Dugan. “The CHP contract is a great start. Other agencies should quickly and publicly pledge to stay away from the tax dodgers at Chrysler and GM.”

Resources:

State announcement of tentative award (no other bidders protested the award during the protest period)

Bid pricing list from the state’s request for proposals

Consumer Watchdog’s previous press release on the tax evasion history of the corporate coalition (from which founding member Proctor and Gamble has since departed)

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Comment Preferences

  •  Is that legal? (1+ / 0-)
    Recommended by:
    johnny wurster

    I would be surprised if states were permitted to consider the legal political advocacy of bidders on government contracts.

    Dear conservatives: If instead of "marriage equality" we call it "voluntary government registration of committed homosexuals," are you on board?

    by Rich in PA on Wed May 30, 2012 at 11:54:16 AM PDT

  •  Consumer Watchdog - It would be useful (1+ / 0-)
    Recommended by:
    johnny wurster

    to actually explain in the diary what the issue is. Specifically what is it that GM and Chrysler are lobbying for?

    "let's talk about that"

    by VClib on Wed May 30, 2012 at 12:00:23 PM PDT

  •  Why would a Corporation that is not based in Ca. (1+ / 0-)
    Recommended by:
    johnny wurster

    pay any tax at all to California? In what way does the state have any claim to tax an out of state entity?

    If it's sales tax, the dealership at the retail level is the collector and payor not the Corp.....

    What are you actually talking about?

    Vaya con Dios Don Alejo
    I want to die a slave to principles. Not to men.
    Emiliano Zapata

    by buddabelly on Wed May 30, 2012 at 12:19:45 PM PDT

  •  Unclear post... (2+ / 0-)
    Recommended by:
    buddabelly, johnny wurster

    I'm not sure what you're trying to say.  It might be important to note that Ford makes a damn good cop car. At one point the Crown Vic was the only model specifically factory modified as a cop  car.  Dunno about this Taurus model, but knowing Ford's rep as a cop car maker, I wouldn't be surprised to see that it was the best one out there. It could be that Ford deserved to win the bid because they built the best model for CA and for no other reason.

     I say this despite being a GM retiree.  

    A learning experience is one of those things that says, 'You know that thing you just did? Don't do that.' Douglas Adams

    by dougymi on Wed May 30, 2012 at 12:32:16 PM PDT

    •  unsure with new chevys.. (3+ / 0-)
      Recommended by:
      dougymi, enhydra lutris, buddabelly

      but I have 2 BLS with CHP and I was told that the reason why they went with Ford Crown Vics for so long is that after the mid/late 90's Chevy stopped making anything that rear wheel drive.  Having rear wheel drive is important because it is one of the basis for all the high speed pursuit driving tactics that the CHP use. Ask any NASCAR or other race car driver and where the power meets the road will greatly effect how you use your steering/brakes/throttle when cornering at high speeds.  

      After the 90's Caprice (nicknamed Shamu because it looked whale like, especially when painted black and white), the CHP tried Volvos but couldn't make them work.  They have a Charger painted in a different color scheme, but this is mainly a PR car.

      The CHP also used late 80's Mustangs and some Cameros as high speed pursuit vehicles, but didn't like them because if the officer caught somebody (even in normal duties) they would have to call an additional officer with a 4 door to transport the person to jail.

      I know that alot of agencies are going to the Charger.

      Two quotes I wish to live by "Strength and Honor" (Gladiator) and "Do or Do Not, There is no Try" (SW-ESB).

      by SQD35R on Wed May 30, 2012 at 01:25:15 PM PDT

      [ Parent ]

  •  Title is bogus, there is no Tax Evasion. In fact, (2+ / 0-)
    Recommended by:
    buddabelly, johnny wurster

    that assertion is slanderous. This diary is massive fail all around. You just completely destroyed your credibility.

    That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

    by enhydra lutris on Wed May 30, 2012 at 03:51:52 PM PDT

    •  can you slip me a clue as to what they're (0+ / 0-)

      talking about?

      except possibly for equipment or inventory taxes (which really suck for small biz but anyway), what tax would an out of state corp owe to Cali?

      Vaya con Dios Don Alejo
      I want to die a slave to principles. Not to men.
      Emiliano Zapata

      by buddabelly on Wed May 30, 2012 at 05:20:44 PM PDT

      [ Parent ]

      •  I don't really know, but the diarist is talking (1+ / 0-)
        Recommended by:
        buddabelly

        about them lobbying to preserve an existing "loophole" in the law, and is calling that "Tax Evasion".  Tax evasion is fraud, using existing loopholes, probably put there intentionally by the legislator, is not. In fact, the Supreme Court has, in essence, blessed utilizing every extant loophole, intentional or not.

        I suspect, but it is only a guess, that it has to do with sales tax on drop-shipped goods. CA waived the right to collect such a tax for a temporary period in order not to have to deal with interstate "waters' edge" type of issues.

        That, in its essence, is fascism--ownership of government by an individual, by a group, or by any other controlling private power. -- Franklin D. Roosevelt --

        by enhydra lutris on Wed May 30, 2012 at 06:56:40 PM PDT

        [ Parent ]

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