Verizon Did Not Pay Taxes From 2008-2010
Citizens for Tax Justice released a report Tuesday that shows that telecom company Verizon paid no taxes in the last three years and received nearly $1 billion in corporate welfare from the government. So far there has been no outrage from the “fiscal conservative” Tea Party or Republican Party.
Verizon enjoyed some $14 billion in federal and state corporate income tax subsidies in the 2008-2010 period even though it earned $33.4 billion in pre-tax U.S. income during that time.
At the federal level, Verizon should have paid about $11.4 billion at the statutory rate of 35 percent during the three-year period. Instead, it got $951 million in rebates, putting its federal tax subsidies at $12.3 billion. Its effective federal tax rate was -2.9 percent.
Verizon has also managed to avoid most state-level taxes as well while pursuing a strong anti-worker set of policies that we have reported on previously. The company has demanded $1 billion in benefit concessions from workers despite paying no taxes and raking in profits.
Verizon has been one of the most efficient tax dodging corporations in the country:
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.
Verizon also used a special tax loophole called the ReverseMorrisTrust to avoid paying about $1.5 billion in federal and state and local taxes on the sale of its landline assets in various states.
Verizon also aggressively seeks state and local tax subsidies through credits, abatements and exemptions. There is no centralized reporting on these subsidies but in this report we document $180 million in special tax breaks and grants Verizon and VerizonWireless received in 13 states…
Despite conservative claims about these types of benefits leading to reinvestment in workers and research and development, Verizon has done the exact opposite, laying off tens of thousands of workers and cutting back on capital expenditures by $1 billion. On top of that, the company’s CEO has made massive bonuses during this same period, completely eliminating any validity to claims that the company is in trouble and has a reason to demand concessions from workers.