Subscribe to Dollars & Sense magazine. Recent articles related to the financial crisis. Psst! Corporations Don't Pay Taxes! This tidbit appears in "The Short Run" column of the January/February issue of Dollars & Sense. Thanks to Barry Deutch for the 'toon, and to D&S stalwart Phineas Baxandall for the tip. An obscure state law allows any Wisconsin resident to find out the taxes paid (or owed) by any taxpayer—including any corporation. You just have to fill out a simple form, which is exactly what researchers from the Institute for Wisconsin’s Future (IWF) did to find out about taxes paid by dozens of corporations doing business in Wisconsin. What they found: among corporations with more than $100 million in revenue, more than 60% paid no state income tax. These included non-Wisconsin companies like Kraft Foods, McDonald’s, Microsoft, and PepsiCo, and Wisconsin-based companies like Johnson Controls, Manpower, Kohl’s, Harley-Davidson, and Rockwell Automation. They also found that of the total tax revenue in the state, only 3% came from corporations; in contrast 36% came from property taxes, 29% from sales taxes, and 26% from individual income taxes. Information about corporate tax payments is notoriously difficult to obtain, though it’s supposed to be public. Even Wisconsin’s relatively progressive law has some bizarre restrictions. “No person may divulge or circulate” the information obtained through the law, with two exceptions: publication by a newspaper or disclosure by a public speaker. So IWF couldn’t send out a press release, since this would have involved “divulging or circulating” the information. Instead the group had to hold a press conference, invite newspaper reporters, and give out the scandalous figures orally. Only when the story had circulated in the media could IWF even post the findings on its own website. The state’s largest business group, Wisconsin Manufacturers and Commerce, tried to discredit the report, claiming that IWF is “a very left-leaning institute that’s heavily funded by labor and public employee unions.” Meanwhile, an affiliate of the group, Forward Wisconsin, which tries to lure businesses to the state, boasts on its website about Wisconsin’s business-friendly tax policies and cites tax rates that are even lower than what IWF alleges. Seems like low corporate tax payments aren’t so much of a secret after all, depending on your audience. Labels: corporate taxes, IWF, Wisconsin Please consider donating to Dollars & Sense and/or subscribing to the magazine (both print and e-subscriptions now available!). |
