CWA Blasts Verizon for Not Paying Fair Share of Taxes
The Communications Workers of America accused Verizon of being a bad corporate citizen, and exploiting weaknesses in the federal and state tax codes to avoid paying taxes. The charges came in a report released Tuesday. Members of the CWA union clashed with Verizon earlier this year during a sometimes bitter two-week strike, that ended in early September. The report draws on one released two weeks ago looking at broader tax avoidance by U.S. corporations by Citizens for Tax Justice (CTJ).
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
"This is a rehash of the same inaccurate and politically motivated statements that union-orchestrated front groups like the CTJ have been making for some time,” Verizon spokesman Ed McFadden said in response. “The fact is, Verizon fully complies with all tax laws and pays its fair share of taxes."
"Verizon should have paid $11.4 billion in taxes between 2008 and 2010,” the CWA report said. “Instead, it got $951 million in rebates, putting its federal tax subsidies at $12.3 billion. Its effective federal tax rate was -2.9 percent.” The report also documented $180 million in special tax breaks and grants Verizon and Verizon Wireless received in 13 states, including $113 million in New Jersey (http://xrl.us/bmipm2). “As a leading company, we expect better of Verizon,” CWA Senior Director George Kohl said during a news conference. “We pay our taxes and they should too.”
Verizon was number three on a list of 280 corporations that CTJ accused of paying less than their share of taxes in its recent report (http://xrl.us/bmipqw). It ranked behind Wells Fargo and AT&T, by CTJ’s account. Verizon “is not the only company that doesn’t pay taxes and they're not the only communications company,” said Robert McIntyre, CTJ director. “Today’s press conference is just a tiny, weeny, piece of our overall study."
CWA spokeswoman Candace Johnson said the group highlighted Verizon because it has made extensive use of the Reverse Morris Trust tax loophole, a target of legislation in the House. The loophole allows big companies to curb their tax burden while spinning off unprofitable assets.
"That’s an area where there is a possible remedy,” Johnson said. “By selling assets to FairPoint, for example, which many analysts believed could not provide the service for northern New England residents, [Verizon] had a big impact on those residents,” she said. “FairPoint filed for bankruptcy, there has been no buildout of broadband and service quality has declined."
The report mentions the strike prominently. “During the recent strike by its unionized workers, Verizon Communications ran full-page ads in major newspapers defending its aggressive contract bargaining position. Featuring blaring headlines in red ink, they sought to give the impression that the company rather than the strikers had the best interests of the public at heart,” the report said. “Verizon turns out to be a lot less concerned about the public interest when it comes to paying federal, state and local taxes.”
CWA also said some of its members plan a march through Washington on Wednesday against Verizon in support of the Occupy D.C. movement. A similar march is planned this week from Albany, N.Y., to Wall Street.