Guess Whose Tax Bill is Smaller Than Yours

Most of the U.S.'s largest companies pay little to no federal income tax. Time for a different kind of tea party?

Over the past six months, a British activist group called UK Uncut has protested at hundreds of retail outlets and bank branches, demanding that the companies stop using legal loopholes to avoid paying taxes. Now the movement has come to the U.S., where US Uncut is working to raise awareness of the fact that many of the U.S.’s largest corporations pay little to no federal income tax. Last week, the group staged protests at 40 Bank of America branches, demanding the financial firm pony up $1.5 billion in income tax on its $4.4 billion of profit in 2009.

Like many in their early 20s, I work four part-time jobs and can barely pay my $450-per-month rent. My bank balance vacillates between double and triple digits – and I have been known to do illegal U-turns to get to the bank to cash a cheque before the weekend.

Like a lot of working folks, I pay my federal taxes, and I don’t resent paying my fair share. I¹m a beneficiary of public schools, highways, national parks, and everything else our taxes pay for. Many patrons at a restaurant where I wait tables are employed in defense industries and highway construction. Their tips go in my pocket to be spent at local businesses, stimulating my state's economy.

What bugs me is learning that the $7 in my wallet is more than the combined amount of federal corporate income taxes paid by Fortune 500 headliners like Bank of America and Boeing. When I recently paid my cellphone bill, I realized I paid more to the government than Verizon has paid for the last two years. What’s wrong with this picture?

Meanwhile, state and federal budget cuts are starting to trickle down and send shock waves through my neighbourhood in Jackson, MS. Our state has a $634-million budget gap, which is over 14 per cent 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 who do business in the Magnolia State.

The cuts coming down in Washington, D.C. are going to hit my state disproportionately hard. Mississippi is a poor state. For every dollar we send to Washington in federal taxes, we get back $2.37 per capita in federal spending. This includes highway construction, defence contracts, Head Start services, health care, public education, and other expenditures. If the two-thirds of corporations that 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 how we must “spread the pain around.”

But all this talk of austerity is unseemly in the face of global corporations that are gaming our tax system and paying nothing, zero, zip toward government services they enjoy. Corporate tax dodging costs the U.S. Treasury up to an estimated $100 billion a year. This is equal to the combined budget gaps in nearly every state of 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 that General Electric uses overseas shore tax havens in Bermuda to shift its income around to avoid taxes, they’re fuming mad.

When my neighbours learn that our government just gave a $35 billion contract to Boeing 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 to yell, “Pay up!”

When corporations shirk their duties to the country, that means less revenue for state infrastructure and jobs. With less revenue, budgets get cut and hard-working folks get handed a pink slip. When there are fewer people working, 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 across the continent.

I can’t shift my income around or take it offshore – Uncle Sam takes it out of my paycheque before I get my hands on it. We shouldn’t stand by and watch our quality of life be destroyed when there’s plenty of money being taken offshore. I want the tax dodgers to pay their fair share.