How Corporate Greed Is Starving Our Public School System

Pay Up Now just completed a review of 2011–12 tax data from the SEC filings of 155 of the largest U.S. corporations. The results show that the total cost of K-12 educational cutbacks in recent years is approximately equal to the amount of state taxes left unpaid by these companies.

Corporations Neglect Their State Tax Responsibilities

For 2011 and 2012, the 155 companies paid just 1.8 percent of their total income in state taxes, and 3.6 percent of their declared U.S. income. The average required rate for the 50 states is 6.56 percent.

A Good Jobs First report describes how companies play one state against another, holding their home states hostage for tax breaks under the threat of bolting to other states, with the whole process masked in inspirational language: "business recruitment" and "retention incentives" instead of the more accurate description of transferring jobs to the state that offers the most generous subsidies. The report notes that "This is a net loss game, with footloose companies shrinking the tax base necessary for the education and infrastructure investments that benefit all employers."

Good Jobs First also reported on the personal income tax (PIT) subsidy, through which employers simply take the state tax paid by their workers. States are pressured into such agreements to keep corporations from moving out. Employees, as a result, are effectively "paying taxes to their boss."

The end result of this hostage-taking is a breakdown in public services, most notably in education. Schools are deemed to be "not working," and a frantic rush toward privatization leads to even more tax cuts for the business interests charged with the responsibility of "fixing" the broken system. But rarely are we informed that it's our self-serving business and political leaders who broke the system. {emphasis in purple mine] 

Tags: corporate tax evasion, underfunded schools

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