Tax-Free Corporations

 In a new report from the Economic Policy Institute (EPI), over 60 percent of corporations in Connecticut, Illinois, Michigan, Tennessee and Wisconsin paid zero state corporate income taxes in varying periods between 2015 and 2019.

 In Colorado, 71 percent of corporations didn’t pay income taxes between 2017 and 2019, and in Florida, a whopping 92 percent of corporations paid zero income taxes between 2016 and 2019.

Between 12 and 27 percent of corporations with $1 billion in taxable income were able to dodge state corporate income taxes entirely over the four years studied.

 In a handful of states, like Ohio and Texas, corporations aren’t subject to corporate income taxes at all.

the effective state and local corporate tax rate has fallen by half, despite surging corporate profits. In 1989, it was 5.2 percent; as of 2017, it was only 2.6 percent. If effective tax rates for corporations hadn’t started declining in the last few decades, EPI finds, then state and local governments would have taken in $57 billion more in revenue. 

As revenues are declining, states are becoming more and more reliant on federal funding and taxes paid by regular households in order to maintain roads and bridges, provide clean water, and fund education. The data suggests that reduced revenues likely have a direct impact on spending. Declining revenues also negatively affect Black and women workers, who are disproportionately employed with state and local tax revenues.

Along with forcing regular taxpayers to shoulder much of the tax burden, there is no evidence that any of these state and local tax cuts “trickle down” to workers, the report finds. Instead, these tax cuts appear to benefit the richest Americans the most. 

Mary Kay Henry, international president of the Service Employees International Union, expressed frustration over how easy it is for corporations to dodge paying state and local taxes.

“It’s absolutely unconscionable that while the two million members of SEIU who clean buildings, care for the elderly and provide essential public services pay their taxes every year, billionaires and their corporations are getting a free ride.” 

Majority of Corporations Don’t Pay State Income Taxes in at Least 7 States (truthout.org)