WASHINGTON - In the last three years, as it raked in more than $100 billion in revenues and $33 billion in U.S. profits, Verizon - which is campaigning to cut its unionized workers' health care - has been a tax deadbeat, a new report says.
Unpaid Bills: How Verizon Shortchanges The Government, by Good Jobs First and the Citizens for Tax Justice, reveals Verizon actually got tax rebates from the federal Treasury worth a total of $951 million, and also paid only about one-third of the state taxes it owed.
With the nominal U.S. corporate tax rate at 35 percent, Verizon should have paid about $11.4 billion in taxes, the report adds, rather than getting about a billion dollars back.
"Verizon doesn't use its tax avoidance gains to keep up its copper network or extend its fiber optic technology to cities like Boston, Baltimore, Buffalo, or other communities, or create quality jobs. It isn't negotiating a fair contract with the workers who have made this company so successful," said CWA senior director George Kohl.
"Instead, it is demanding nearly one billion dollars in givebacks and making sure that its top executives stay in the top one percent of American earners. That's why we say 'the 99 percent' are picking up Verizon's tax tab."
Verizon responded by attacking the credibility of both sponsoring groups. It also claimed many of the taxes involved were deferred and will be paid later.
But the report points out that Verizon is avoiding paying taxes now. Good Jobs First called it one of the top corporate deadbeats in the U.S.
"At the federal level, despite posting more than $33 billion in U.S. pre-tax profits in the past three years, the company has arranged its tax affairs so it received net payments from the Treasury of nearly one billion dollars. It has also used a tax gimmick known as a 'Reverse Morris Trust' to avoid more than $1.5 billion in taxes while selling off parts of its landline business," the report points out.
"And during the past three years it has paid a nationwide state income tax rate of less than three percent and received more than $1 billion in state tax subsidies" - a figure that would have been even higher had Verizon not cancelled construction of a call center in upstate New York, for which state and local governments had promised $600 million.
"While these federal and state tax subsidies are good for Verizon, they're bad for the rest of the taxpaying public. When the federal and state governments collect $14 billion less in tax revenues from Verizon, the result is less spending on critical services, a higher public debt load, and higher taxes for others."
Photo: Tony the misfit // CC 2.0