Telecommunications giant Verizon has been urging its employees to oppose the corporate tax hike being considered by Democrats in Congress, according to a leaked email obtained by The Intercept.
An internal email sent to employees tells workers that “your voice is critical” and that “We need you to lend your voice to the fight.” The email features a link that leads to a form letter to send to the employees’ representative in Congress.
The email goes on to claim that “American companies like ours would be seriously disadvantaged” if they were forced to pay a higher tax rate — even though Verizon has been one of the most egregious corporate tax dodgers of the last decades, often paying a negative effective tax rate.
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Even before Republicans recklessly slashed taxes for corporations in 2017 from a statutory rate of 35 percent to a dismal 21 percent, Verizon was incredibly effective at skirting taxes. According to an Americans for Tax Fairness report, between 2008 and 2012, Verizon made $19.3 billion in profits but paid no taxes — instead, it claimed $535 million in refunds.
Democrats are currently considering a conservative corporate tax raise to 26.5 percent, a far cry from the pre-2017 rate. Still, Verizon told employees that, “With the support of this grassroots network, Verizon is going to be on the front lines of this fight.” Of course, the fight isn’t grassroots, but rather fought on behalf of and by huge corporations and lobbyists.
— Ken Klippenstein (@kenklippenstein) October 14, 2021
The email repeats a questionable claim that, if the corporate tax hike goes through, then employees would be most affected. “Recent studies have identified that as much as 70 to 85% of the corporate tax is borne by wage earners,” the email reads.
The source of this statistic is unknown, but The Intercept traces it back to Trump administration talking points. Former Treasury Secretary Steve Mnuchin cited a similar statistic in an interview on Fox News in 2017, saying that 70 percent of corporate taxes fall on workers’ shoulders, whereas the administration estimated that that figure was 75 to 85 percent.
Economists have disputed this theory, and professional fact checkers have found that there is no consensus among economists on who bears the tax burden when corporate taxes are raised. Many of the sources arguing that workers ultimately pay for most of the taxes, however, are conservative.
Perhaps more importantly, Republicans promised that money would trickle down when they slashed the corporate tax rate in 2017, but workers have yet to see those benefits. Meanwhile, the corporate tax hike currently in question would go toward government assistance programs like extending the child tax credit that cut child poverty in half.
“I was pretty shocked they would actually send us something like that,” a Verizon employee told The Intercept. “I think it’s pretty pathetic that they threatened employees by saying we would be most affected.”
The company also cites its participation in the Reforming America’s Taxes Equitably, or RATE, Coalition in its efforts to keep the corporate tax rate low. RATE consists of 35 large corporations including Disney, AT&T and Boeing. The group has been active in a huge corporate lobbying campaign against the reconciliation bill, specifically opposing the corporate tax hike. RATE members have contributed $200,000 to Sen. Kyrsten Sinema (D-Arizona), who is fighting against raising corporate taxes. A tax hike, RATE has argued, would decrease the U.S.’s competitiveness globally and would harm workers.
Economists say that the competitiveness argument is nothing but a distraction by Republicans. “We find [corporate tax cut proponents’] central argument — that U.S. corporations face high corporate taxes — to be empirically false,” wrote the Economic Policy Institute (EPI) in a 2017 report that was written before the 2017 tax cuts were signed into law.
“We find that even if the effective corporate tax rate were higher (if loopholes were closed), economic theory and data do not support the idea that cutting these rates would encourage further investment in the U.S. or benefit Americans in general,” EPI continued. “We find that such cuts would primarily benefit a small number of high-income capital owners while increasing the regressivity of the tax system overall.”