JEFFERSON CITY, Mo. – The Coalition to Protect Education and Health Care, a non-partisan group of concerned parents, teachers, health care employees, seniors, and working families, rallied here on Sept. 9 at the state capital urging the General Assembly to close corporate tax loopholes and restore funding for education.

The coalition, whose member organizations includes Metropolitan Congregations United (MCU), the Service Employees International Union, ACORN, and Jobs With Justice, among others, contends that funding education is more important than giving tax breaks to large out-of-state corporations and the wealthy.

“Ninety of Missouri’s biggest corporations – those with $50 million in taxable income – didn’t pay a penny in state corporate taxes in 2002, while more than 16,000 of the state’s most profitable corporations paid less in taxes than the average Missourian,” according to Rich Creason of MCU. Closing corporate tax loopholes is at the center of the coalition’s work.

At the Sept. 9 General Assembly Special Session, Creason told Missouri legislators to “make sure every Missourian pays their fare share of taxes, including large corporations.”

Amy Blouin, executive director of the Missouri Coalition for Budget and Policy Priorities, said, Missouri ranks 46th in taxes of large corporations. She added, “The other four don’t require corporations to pay taxes.”

Some of the state’s most outrageous corporate tax loopholes include:

• The “Geoffrey” loophole, which allows corporations to transfer profits to an out-of-state “passive investment company” to avoid paying Missouri taxes. Corporations that use this loophole include Toys R Us, GAP, Burger King, Kmart, and Long John Silver’s. Closing this loophole would raise $15 million.

• The “Yacht Loophole,” which allows luxury boats weighing over five tons to be registered with the U.S. Coast Guard to avoid paying Missouri taxes. Owners of smaller boats are required to pay the full tax. Closing this tax loophole would raise $4.2 million.

• The “Timely Filing Discount for Withholding Tax Loophole,” which allows Missouri corporations to receive a discount for sending the withholding taxes they collect from employees to the state. Missouri is the only state that provides this discount. Closing this loophole would raise $18.4 million.

Closing Missouri’s 40 corporate tax loopholes could generate more than $186 million for the state budget, money that could be spent on health care, education and other social services for working families.

At the state capitol rally Missouri State Sen. Jacob, Days, Shoemyer and Johnson all voiced their support. As protesters chanted, “ABCs not CEOs,” Gov. Bob Holden said, “The issue is very simple. Are we going to support school children or corporate interests?”

The coalition held a press conference Sept. 8 at Carver Elementary, one of 16 St. Louis city schools closed because of the state’s budget crisis, to dramatize its position that “before making deep cuts into education, health care, and other basic services, the state should close corporate tax loopholes.” The Missouri Legislature has cut more than $340 million from the public school system, increasing class sizes and threatening thousands of teachers’ jobs.

Missouri’s budget cuts are just one example of a broader, national crisis. The Bush administration’s economic policy of tax breaks for the rich places the burden of the economic crisis on working families. And, as a result, funds for social services, education, health care and other necessities needed by working families are no where to be found.

The author can be reached at tonypec@pww.org

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CONTRIBUTOR

Tony Pecinovsky
Tony Pecinovsky

Tony Pecinovsky serves as fundraising co-chair for St. Louis Jobs with Justice, is a member of the United Media Guild and delegate to the St. Louis Central Labor Council. He is also the president of the St. Louis Workers' Education Society. His work has been published in the St. Louis Labor Tribune, Alternet, Shelterforce, Political Affairs and Z-Magazine, among other publications.

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