A file arrived from the company’s accountant, and out of idle curiosity (a trait of mine) I took a look. It was a gleeful letter to the publisher, bragging that once again the man had managed to file taxes for the corporation showing it owed no income taxes.
I was a single mom of three, making about $15,000 a year (this was in the mid-’70s, in a mini-recession), and having federal, state and city income taxes taken out of my paycheck. I realized in a flash that I was paying for the things my company was not: I was paying for the daily sweeping of the street in front of our building, for the policeman who walked the beat, for the garbage pickup, for the fireman who would rush to our help if needed. In a wider net, I was paying for schools, public transportation, national defense. What was I NOT paying for?
And this was at a time when Ronald Reagan canceled school breakfasts for kindergarten and first grade, a boon that had allowed me to leave my youngest child at the classroom door and ride my bicycle down through Central Park to work.
The accountant added that in spite of not showing a profit, the company managed to pay a bonus of $25,000 to a few executives, to compensate them for the generally poor benefits the company offered. If the minimum-pay young kitchen workers in the food department developed health problems, too bad.
According to the GAO report released last Tuesday, one in four large U.S. corporations paid no taxes on revenue of $1.1 trillion in 2005. The tax code allows corporations to claim a long list of deductions, write-offs, operating losses and tax credits. And some politicians are calling for lowering the corporate tax rate!
Byron Dorgan (D-N.D.) said, “It’s shameful that so many corporations make big profits and pay nothing to support our country. The tax system that allows this wholesale tax avoidance is an embarrassment and unfair to hardworking Americans who pay their fair share of taxes.”