National Journal reported last night that a new coalition of corporations has formed, with the goal of pushing the fiscal super committee (tasked with finding $1.5 trillion in deficit reduction) to adopt a lower corporate tax rate:
A group of blue chip companies and business organizations is launching a coalition Tuesday morning to push Congress to lower the corporate tax rate and make it more competitive with America’s trading partners.
The Reducing America’s Taxes Equitably Coalition includes Altria Client Services, FedEx, Verizon, the Association of American Railroads and Walt Disney
“In a global economy where capital is highly mobile, it is simply harder to compete from America,” the companies’ executives wrote in a letter. “A lower corporate tax rate will boost investment in the U.S., bringing more American jobs, innovation and growth.”
But American companies already pay the second lowest taxes in the developed world, once all of the loopholes and deductions in the corporate tax code are accounted for. American corporations are sitting on record amounts of cash, so its unclear why more cash (in the form of tax breaks) would lead to more hiring.
In addition, as the Nation’s Allison Kilkenny noted, two of the companies involved in the coalition — Verizon and FedEx — are already dodging their share of taxes:
Both Verizon and FedEx are multibillion-dollar corporations that pay lower tax rates than you do, and the reason Verizon is able to do this is by creatively redirecting profits to their foreign wireless partner, Vodafone.
Vodafone has been the longtime target of UK Uncut due to its equally unscrupulous tax dodging practices. The company claims a large portion of its revenue should not be subject to British taxation because they reroute the cash through Luxembourg, which has a tax rate of under 10 percent. [...] So here we have an exploitative company, Verizon, channeling its income to another corrupt partner in Britain, all in the name of avoiding taxation.
And then there’s FedEx, a company with a long history of battling the IRS, but which has thus far remained relatively under the radar despite its shady practices. The GAO released a report in 2007 that stated FedEx has twenty-one subsidiaries in jurisdictions listed as tax havens (Antigua, Bahamas, Barbados, Bermuda, three in the Cayman Islands, Costa Rica, Grenada, two in Hong Kong, three in Ireland, two in Netherland Antilles, Singapore, St. Kitts, St. Lucia, Turks and Caicos Islands and the US Virgin Islands).
Several companies, including Boeing and Cisco, have lobbied for tax breaks while engaging in widespread tax dodging. In fact, a whole slew of companies that pay incredibly low U.S. corporate taxes are lobbying for a specific tax break on overseas profit that, when tried previously, did not cause any of its desired effects.