Florida’s taxpayers deserve smarter investment of our money. We rank near the bottom in education funding. Our roads and bridges cry out for repairs and upgrades. Florida inmates have needlessly died because the state was trying to economize on prison health care. We invest the least in our state services, per capita, in the country at less than half the national average. Many wounds are self-inflicted because, instead of investing in people and communities, the Legislature spends resources on tax cuts to the wealthy and big corporations.
Like all states, Florida relies on a partnership with the federal government for funding many public services, including building highways and maintaining mass transit systems. It’s good news that Congress has committed to extending the soon-expiring fund that pays for transportation projects.
What’s disturbing is that a major plan under consideration is to pay for it by handing tax-dodging corporations a huge tax cut. Leading proposals would collect only a fraction of the taxes owed by multinational corporations on $2 trillion in profits they’ve stashed overseas.
Sen. Bill Nelson, a member of the U.S. Senate Finance Committee, can help recast the debate. He should help his colleagues focus on collecting billions of dollars in unpaid corporate taxes. Keep in mind that the corporations already owe about $600 billion in U.S. taxes on these sheltered profits. They just haven’t paid yet.
Just 50 companies owe three-quarters of this money. Unfortunately, the plan in Washington is for deeply discounted tax rates to entice these tax-dodging companies to pay some of what they owe, recovering nearly $400 billion less than these corporations owe.
You may wonder why anyone would cut the tax rate on taxes already owed. It’s because the corporations have been playing a waiting game. A loophole called “deferral” allows them to hold foreign profits overseas indefinitely without paying the U.S. taxes that would otherwise be due (after subtracting any foreign taxes paid). In fact, the tax rate they’ve paid on their overseas earnings averages a paltry 6 percent, and all of that goes to foreign governments.
An intensive corporate lobbying campaign has turned the attention of D.C. politicians away from the hundreds of billions of dollars in uncollected corporate taxes. Instead, they are now obsessed with allowing these profits to be taxed for a fraction of what is owed and lowering a corporate tax rate that few corporations ever pay. Deductions, credits and other loopholes chip away at the official 35 percent tax rate on corporate profits.
One year the rate corporations paid was all the way down to 13 percent, according to a nonpartisan congressional study. And sometimes they pay nothing at all. Dozens of big profitable companies, including General Electric, Verizon and Boeing, went five straight years with a zero tax bill, according to Citizens for Tax Justice.
Of course, if we collected all the money owed to us from corporate tax dodgers, we could do more than fix transportation. We could raise teacher salaries and improve schools, especially those suffering the worst neglect in Florida’s inner cities. A first-rate educational system would lure more businesses to our state and create more jobs. We could keep faith with the public employees who serve us, instead of discarding them in large numbers every time bad political decisions create another budget crisis in Florida. We could do that and more if we collect the taxes owed by a handful of huge, tax-dodging corporations.
Andy Madtes is executive director of the American Federation of State County and Municipal Employees Florida.
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