Budget Cuts and Corporate Tax Cheats

Global corporations are gaming our tax system and paying nothing, zero, zip toward government services they enjoy.

By Carl Gibson

Like many Americans in their early 20s, I work four part-time jobs and can barely pay my rent. My bank balance vacillates between double and triple digits.

Like a lot of working folks, I pay my federal taxes and I don’t resent paying my fair share. I’m a beneficiary of public schools, highways, national parks, and everything else that our taxes pay for. Many patrons at the restaurant in Jackson, Mississippi, where I wait tables, work for military contractors or are highway construction workers. Their tips go in my pocket to be spent at local businesses, stimulating Mississippi's economy.

What bugs me is learning that the seven bucks in my wallet exceeds the combined amount of federal corporate income taxes paid by some Fortune 500 headliners like Bank of America and Boeing. When I recently paid my cell phone bill, I realized I had paid more to the government out of my last paycheck than Verizon has paid for the last two years. Isn’t there something wrong with this picture?

Meanwhile, state and federal budget cuts are starting to trickle down and send shock waves through my neighborhood. Our state has a $634 million budget gap, which is more than 14 percent of our state budget. Our lawmakers are preparing to make decent, taxpaying, middle-class Mississippians and their families shoulder that cost, while asking nothing of the numerous corporate tax dodgers that do business here in the Magnolia State.

The cuts Congress is negotiating will hit my state hard. Mississippi is poor. For every federal tax dollar we hand over to the Treasury, we get back $2.37 per capita in government spending. This includes highway construction, military contracts, Head Start, health care, public education, and other expenditures. If the two-thirds of U.S. corporations that use shady loopholes to dodge taxes paid them instead, my state could recoup up to $432 million in federal funds each year, turning our deficit into a surplus in a matter of two fiscal years.

Our Governor Haley Barbour, like pretty much every governor in the country, is talking about how budget cuts are “inevitable” and that we must “spread the pain around.”

But all this talk of austerity is unseemly in the face of global corporations gaming our tax system and paying nothing--zero, zip--toward government services they enjoy. Corporate tax shenanigans cost the U.S. Treasury up to an estimated $100 billion a year. This is equal to the combined budget gaps of nearly every state in the country.

When I tell my coworkers and neighbors about these corporate tax dodgers, they feel betrayed by our politicians who talk about “being broke.” When I explain to them that General Electric uses offshore tax havens in Bermuda to shift their income around to avoid taxes, they get fuming mad.

When my neighbors learn that Boeing just received a $35 billion contract to build planes, we cheer the good jobs. But when we learn that Boeing hasn’t paid federal taxes in three years and has 38 subsidiaries in overseas tax havens, we want Boeing to hear us yell “Pay up!”

When corporations shirk their duties to the country, there's less revenue for state infrastructure and jobs. With less revenue, budgets get cut and hard-working folks get pink slips. When fewer people work, local small businesses suffer from decreased demand. When demand is at a standstill, small businesses have no choice but to cut costs by firing employees or closing up shop. A corporation exploiting tax loopholes may cheer up its shareholders, but it hurts small businesses and working Americans.

I can’t shift my income around or take it offshore--Uncle Sam takes it out of my paycheck before I even get my hands on it. We shouldn’t stand by and watch our quality of life be destroyed when our money leaves our shores. I want the tax dodgers to pay their fair share.