New NEA campaign exposes true cost of corporate tax loopholes
Breaks for big businesses shortchange students and defund the American Dream
Washington, DC - April 09, 2012 -
As the deadline approaches for Americans to file their taxes, a significant portion of profitable corporations may not pay a dime. The reason? Corporate tax loopholes.
Through a new campaign, the National Education Association is exposing the true cost of corporate tax loopholes…a shrinking middle class and the erosion of critical services, including public education. Part of the effort includes a one-minute animated short called The Hole and an online petition for the public to show support for closing corporate tax loopholes.
“Students and working families are feeling the adverse effects of a carefully crafted, perfect storm,” said Dennis Van Roekel, president of NEA. “At home, families are struggling to hold on to what they have. At school, students are confronted with cuts to the critical resources they need to succeed. Big businesses are sitting on record profits, and are taxed at historically low rates. It is time we put people ahead of profits.”
Citizens for Tax Justice (CTJ) examined Fortune 500 corporations and found that 280 made profits in each of the three years, 2008, 2009 and 2010. Of the 280 corporations, 30 averaged less than zero in taxes over the three-year period. That means that these highly profitable companies got money back when they filed their taxes. Seventy-eight of them paid no taxes in at least one of the three years. CTJ determined that the federal revenues would increase by nearly $1.5 trillion over the next ten years if lawmakers closed seven federal corporate tax loopholes (2 pgs, 274KB, PDF).
- NEA researchers determined how a fraction of the nearly $1.5 trillion could benefit students and public education.
- By investing just 24 percent, every impoverished child under age five in America could attend a high-quality pre-school. Right now, less than 20 percent of eligible children are being served.
- By investing just 19 percent, every school in America could get, on average, half a million dollars for Title I support to help students from low-income families.
- By investing just 28 percent, the government could boost the maximum Pell Grant award so that it would cover half the average cost of a public college.
- By investing just 14 percent, the federal government could finally meet its unfulfilled promise to provide 40 percent of the cost of educating students with disabilities. Right now states are picking up where the feds fall short of their obligation. With the revenue from corporate tax loopholes, each school district in America could save $1.5 million…freeing up local dollars for resources students need.
Van Roekel added, “Businesses should be partners in promoting great public schools. They rely on schools to produce an educated workforce. Businesses can help not only by sponsoring the science fair, but also by paying their fair share. We can’t continue to shortchange students and defund the American Dream.”
Corporate tax loopholes come in a variety of forms. One allows corporations to indefinitely defer U.S. taxes on offshore profits, incentivizing the manipulation of profits in an attempt to show a greater portion as being made overseas. Another large loophole lets companies deduct the costs of investments in vehicles and other equipment faster than they wear out. This allows companies to basically double dip by getting a loan to buy the equipment, and then write off both the interest and depreciation. Yet another loophole serves as a subsidy to the highly-profitable oil and gas industry.
“The tide must change. Balance must be restored,” Van Roekel said. “Our students deserve better and they are counting on everyone, big business included, to pay their fair share. We must make the right investments and choose the right priorities.”
For more on NEA’s Tax Day efforts
For NEA analysis of how nearly $1.5 trillion could benefit students and public education:
- Title I
- Pell Grants
- IDEA (Students with Disabilities)
- Read Op/Ed by Van Roekel and small business owner, Joseph Rotella
# # #
The National Education Association is the nation’s largest professional employee organization, representing more than 3 million elementary and secondary teachers, higher education faculty, education support professionals, school administrators, retired educators and students preparing to become teachers.
CONTACT: Ramona Parks-Kirby, (202) 822-7823, firstname.lastname@example.org
Education Votes Series on Corporate Tax Loopholes