Verizon Pays a Negative Federal Income Tax Rate, Then Pursues More Tax Breaks
Citizens for Tax Justice has joined with Good Jobs First to follow up the recent report that found 30 Fortune 500 companies had paid a negative federal income tax rate over three years, looking at one of those companies in depth. From 2008 to 2010, Verizon paid an effective federal income tax rate of -2.9 percent; that meant that instead of the $11.4 billion the corporation would have paid at the statutory rate of 35 percent, "it got $951 million in rebates, putting its federal tax subsidies at $12.3 billion."
It wasn't just federal income taxes that Verizon dodged:
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.
But that's not all. Verizon has received at least $180.8 million in state and local subsidies in recent years, extracted in exchange for locating facilities and supposedly creating jobs—mostly low-wage ones—in the communities.
None of that, from the -2.9 percent federal income tax rate, the 2.6 percent state income tax rate, the $180.8 million in state and local subsidies, and several other large tax breaks Verizon has gotten, has been going reinvested in workers or the communities they live in:
Verizon has been eliminating jobs and investing less. During the past three years, the total number of employees at Verizon has fallen by more than 40,000 and the company’s capital expenditures have declined by $1 billion. Nor did these subsidies lead to higher compensation for Verizon’s employees—the company is demanding more than $1 billion in wage and benefit concessions from its 45,000 union-represented workers.