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Study: Verizon Hasn't Paid a Cent in Taxes in 3 Years
Verizon, Comcast, AT&T Huge Beneficiaries of Loopholes, Subsidies
by Karl Bode 10:37AM Thursday Nov 10 2011 Tipped by Krisnatharok See Profile
Two non profits, the Citizens for Tax Justice and the Institute on Taxation and Economic Policy, are circulating a new study named Corporate Taxpayers & Corporate Tax Dodgers (pdf) which names and shames corporations that are dodging taxes. The study examines financial reports from 280 profitable from the Fortune 500 between 2008 thorugh 2010. Of those companies, 78 paid no federal income tax in at least one of the last three years and 30 companies paid no taxes during the entire period.

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Many of the companies actually wound up getting money back from the government using an endless series of loopholes. Wells Fargo tops the list overall in terms of government subsidies, getting nearly $18 billion in tax breaks over the last three years. AT&T and Verizon are in second and third place, respectively.

The report is particularly tough on Verizon, noting the company hasn't paid a cent in taxes in the last three years. As you might imagine, Verizon disagrees with the study results, and is sending this statement out to the press:
Verizon paid out $1.79 billion in taxes over 2008-2010, and reported earnings of $5.25 billion over this same period. In addition, Verizon has annually invested $16.5 billion in technology infrastructure. This investment has created and sustained jobs, so U.S. economic development policy allows for the payment of some taxes to be deferred. The CTJ treats deferred taxes as non-existent, it does not account for the $1.79 billion in taxes Verizon paid out over the past three years despite deferrals, and it incorrectly calculates earnings for Verizon to include income belonging to Vodafone, Verizon's partner in Verizon Wireless.
Verizon's arguing that deferred taxes (which can in some cases be perpetually deferred) still count as taxes paid. Of course Verizon also gets ample subsidies as well, which also offset any taxes paid -- and are about to get billions more in subsidies courtesy of new "reform" of the Universal Service Fund. There is really no debate that Verizon, AT&T and Comcast have lobbied their way to immense and borderline absurd subsidy and tax break benefits on the state and federal levels -- often for doing absolutely nothing.

Verizon has been using Reverse Morris Trusts to offload unwanted networks to small telcos with some disastrous effects. While the deals go poorly for acquiring companies, Verizon has offloaded mountains of debt and obtained huge tax breaks using the sophisticated financial maneuver. On the state level Verizon gets oodles of subsidies and tax breaks as well. For example, the company for generations didn't pay property tax in Massachusetts until a 1915 law, designed to help speed up phone service deployment, was recently shelved. Of course when the state stated they'd remove the law, Verizon repeatedly threatened to hold back infrastructure upgrades (Boston currently still doesn't have FiOS).

143 comments .. click to read

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2 recommendations

reply to shadow700

Re: Credibility

Tax dodgers? Are you serious? The tax code is a mess, but until we rewrite it, abiding by the code and paying the requisite levy is hardly dodging taxes.

Reptiles Are Cuddly And Pretty
Mount Airy, MD

2 recommendations

reply to amarryat

Re: Worth repeating - corporations don't pay taxes-customers do

said by amarryat:

Not to mention the fact that all of the employees are having taxes withheld from their paychecks.

As much as I hate any form of income tax, I'd actually love to see withholding abolished. Force everyone to cut tax checks to the various taxing authorities to which they must every quarter. Force them to save the money that they earned and force them to watch it sit there and not be spendable.

People really need to see how much they actually pay in tax every time they are paid.
"Net Neutrality" zealots - the people you can thank for your capped Internet service.

Verizon FiOS

Marshfield, MA
·Verizon FiOS

2 recommendations

reply to Paxio

Re: Property tax clarification

Instead of taxing corporations, the govt. ought to tax us directly. Either way, we're going to pay. Charging Verizon a property tax on poles will be reflected by a rate increase.

The bottom line is that those in govt. want more money, and are constantly dreaming up ways to fool all of us into paying more. A tax on a corporation is a tax on all of us.


West Coast

2 recommendations

reply to decifal

Re: The ONLY hope for America is Ron Paul!

I do not see how an adjustable tax rate based on loopholes rules regulation blah blah blah is constitutional. If indeed all men are created equal, then all men should pay equally. This has nothing to do with where you work or your economic status. Let's have true equality in America, everyone pays their fair share this way. No crying about how much or little rich pay etc.
A flat tax puts everyone on the same level in their responsibility to be a citizen of the U.S. economically speaking.

New Port Richey, FL

3 recommendations

reply to Karl Bode

Re: Credibility

said by Karl Bode:

"attempts to make big corporations look like tax dodgers"

Uh...that actually requires effort?

It does when the article makes no distinction between tax avoidance which is legal and tax evasion which is not.

This 'study' was just a hit piece by people who have either no idea of how the tax code works or they just want to take an unjustified attack on corporations.
Always Reach Beyond Your Grasp

Tavistock NJ

2 recommendations

reply to pnh102

Re: Worth repeating - corporations don't pay taxes-customers do

Sure, when some companies pay corporate taxes and other can avoid it, there are distortions in the marketplace that makes things less economically efficient. That is the fault of government.

There should be no corporate taxes. But public officials love to tax the sheeple indirectly - it makes them believe they aren't being taxed. If all taxes were levied against individuals directly, as it should be, they would finally realize how much money the government was taking from their pockets.
»www.politico.com/rss/2012-electi ··· tion.xml
»www.politico.com/rss/2012-electi ··· blog.xml

Tavistock NJ

4 recommendations

Always this big brouhaha over corporations paying or not paying taxes. It is worth repeating that it is the customers of these companies who pay the taxes thru higher prices. Anyone cheering for corporations paying higher taxes are really just cheering to pay more taxes themselves - unless you are one of those very few people who never buy any product or service.