Despite record profits and paying one of the lowest effective tax rates – and even a negative tax rate for several years – Verizon urges its employees to urge Congress to oppose a corporate tax hike favored by the Biden government.
“We need you to give your voice to the fight,” read an internal email from the company that was widely distributed to the telecommunications giant’s employees. “Click here to take action.” The prominent link leads to a form message that is sent to the employee’s congressional representative.
The email is a sign of the desperation of large corporations to stop corporate tax hikes. To make grassroots workers worry, the memo argues that “up to 70 to 85% of corporate tax is borne by wage earners.” It’s unclear exactly where this claim came from – no source is given – but it’s a common rhetoric from employers arguing for a lower tax rate.
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When Trump administration Treasury Secretary Steve Mnuchin cited a similar number in an interview with Fox News Sunday host Chris Wallace about Trump’s tax cuts in 2017, Mnuchin said that “most economists believe that over 70 percent of corporate taxes are paid by workers. Wallace cited his own Treasury Department’s assessment that between 75 and 85 percent of the proceeds from corporate tax cuts would go to the company’s shareholders, not the workers.
“I was pretty shocked that they would actually send us something like this,” said a Verizon employee, who refused to be named for fear of retaliation, in the email. “I think it’s pretty pathetic that they threatened employees by saying we were the hardest hit.”
Screenshot: Received from The Intercept
The memo also railed against the corporate tax rate, saying the U.S. aggregate rate exceeded the rates imposed by our leading competitors, making any increase a serious threat to our global competitiveness. But many corporations use a number of clever accounting tricks to pay significantly less than the technical corporate tax rate – and Verizon is a prime example of this. From 2008 to 2012, it had hidden $ 1.9 billion in accumulated profits overseas – for which it paid no taxes, according to Americans for Tax Fairness.
“Urgent update – tax increases in sight,” was the subject line of the internal email sent to employees on September 27th by Verizon’s executive vice president and chief financial officer Matthew Ellis. “The Congress majorities in the House and Senate are moving forward with a plan to increase the corporate tax rate that will have a significant impact on you and our economy as it continues to grapple with the recovery from a global pandemic.” The memo warns that “One of the biggest problems with an uncompetitive corporate tax rate, the impact it has on American workers like you,” concludes the memo on an optimistic note: “With the support of this grassroots network, Verizon will be at the forefront of this fight.”
“With the support of this grassroots network, Verizon will be at the forefront of this battle.”
However, the effort is anything but basic. As the memo shows, Verizon has been “a leading member” of the RATE Coalition, which stands for Reforming America’s Taxes Equitably, for years. Members of the business lobby include Lockheed Martin, Disney, and AT&T. In March, RATE hired Forbes Tate Partners to oppose the Biden government’s plan to raise the corporate tax rate. By July, Forbes had spent $ 80,000 on Tate, according to lobbying records. Several of the lobbyists were themselves members of the Congressional leadership now pushing for the tax hike, including Ryan McConaghy, a long-time former employee of Senate Majority Leader Chuck Schumer, and Stacey Rolland, a former senior adviser to House Speaker Nancy Pelosi. (RATE co-chair Elaine Kamarck served in the Clinton White House and has been a member of the Democratic National Committee since 1997.)
Regi Simpson, the government relations manager for Verizon listed at the bottom of the email, previously worked for the senior vice president and national policy director of the US Chamber of Commerce, a large corporate group. Prior to that, she worked in the office of Rep. Richard Hudson, RN.C. Simpson did not respond to a request for comment.
A corporate tax hike has been found to be a critical part of funding the Democrats’ massive infrastructure plan, which amounts to $ 3.5 trillion over 10 years. Under President Donald Trump, the corporate tax rate was reduced from 35 to 21 percent. The current proposal for the next law of reconciliation provides for a corporate tax rate of 26.5 percent.
According to Accountable.US, a watchdog group that oversees corporate lobbying, RATE top corporate members donated $ 200,000 to Arizona’s Senator Kyrsten Sinema. RATE has also reportedly planned a seven-digit digital ad campaign to oppose Democrats’ plans to raise corporate taxes.
The memo ends with the following disclaimer: “Your participation is entirely voluntary and not a condition for your employment.”
Verizon did not respond to a request for comment.