Verizon Takes in $100 Billion, But Lets Us Pay Their Taxes

How do you make $100 billion and pay virtually no taxes? Call Verizon and ask them, since the telecom giant seems to have it down flat. “According to a new report, “Unpaid Bills: How Verizon Shortchanges Government Through Tax Dodging and Subsidies,” “Verizon is one of the country’s most aggressive corporate tax dodgers.”

The report was prepared by Citizens for Tax Justice and Good Jobs First, and released by the two organizations and the Communications Workers of America. It’s point is simple: “While most Americans are struggling to make ends meet and pay their fair share of taxes, Verizon actually received a federal tax rebate of nearly $1 billion from the United States Treasury.”

Verizon’s tax lawyers have won the company a virtually tax-free status. “Verizon, a $100 billion dollar corporation,” said CWA, which released the report, “paid an effective federal tax rate of –2.9 percent between 2008 and 2010. For the year 2010 alone, Verizon’s federal tax rate was -5.7 percent.”

The report’s specifics are especially startling:

• 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 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 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 Verizon Wireless received in 13 states.

The result of this tax dodging has benefited no one except managers and investors. “Whatever savings have come from this tax dodging have not been used to invest in the company or its workforce. Verizon has been eliminating jobs and investing less.”

Unpaid Bills: How Verizon Shortchanges Government Through Tax Dodging and Subsidies (report, Citizens for Tax Justice and Good Jobs First, Nov., 2011)