corporate tax avoidance – Chicago Newstips by Community Media Workshop http://www.newstips.org Chicago Community Stories Mon, 14 Jul 2014 17:31:05 +0000 en-US hourly 1 https://wordpress.org/?v=4.4.12 Corporate taxes and the state’s fiscal crisis http://www.newstips.org/2013/09/corporate-taxes-and-the-states-fiscal-crisis/ Thu, 26 Sep 2013 20:23:20 +0000 http://www.newstips.org/?p=7720 A coalition of community, labor and religious groups will hold a press conference at 9 a.m., on Friday, September 27 at the Thompson Center press room and march over to the Bilandic Building, 160 N. LaSalle, to a House Revenue Committee hearing on the Illinois Corporate Responsibility and Tax Disclosure Act.

 

Illinois is in fiscal free-fall, but our political leaders seem incapable of addressing a structural deficit created by our regressive tax system.

The state’s crisis threaten to swamp the budgets of cities and school districts as well as funding for human services and health care, but “the only solutions that are ever discussed are deeper and deeper cuts,” said Kristi Sanford of Northside POWER, part of a statewide coalition pushing for corporate tax accountability.  “But these cuts just hurt Illinois families and the state’s economy — and no amount of cuts can solve the problem.”

Meanwhile Springfield is leaving serious money on the table:  two-thirds of corporations operating in Illinois paid no state income tax in 2010, according to the Illinois Department of Revenue.

According to the Governor’s Office of Management and Budget, 80 percent of state revenues come from individual income tax and sales tax receipts; only 9 percent comes from corporate income taxes.

Corporations reporting billions in profits are estimated to have paid no state income tax.

We don’t know what individual corporations are paying, but major Illinois-based corporations — with massive profits — paid no federal income tax from 2008 to 2010 (in some cases receiving huge tax subsidies instead), according to Citizens for Tax Justice.

Who’s not paying?

And since state taxes track federal taxes, advocates say we can probably assume no Illinois income taxes were paid over those years by Boeing, with $14 billion in profits; Baxter International, with $1.3 billion in profits; Integrys Energy Group, with nearly $1.18 billion in profits; and Navistar International, with $1.1 billion in profits.

The problem is that for too long, corporations have entirely dominated tax policy debates, according to Dan Bucks, former director of revenue Montana, who advocates for corporate tax accountability measures.  He backs a measure now under consideration here to encourage greater public participation by requiring large publicly-traded corporations operating in Illinois to disclose their state income tax payments.

F”The citizens of Illinois ultimately own the tax system of the state,” said Bucks.  “They have a right to sufficient information to ensure that their tax system matches their values and is effective in achieving their goals.”

Fair Economy Illinois, a coalition of grassroots community organization from Chicago and downstate, is planning to pack Friday’s revenue committee hearing to demand passage of HB 3627.

Stalled in House

The State Senate passed a companion bill last year, but the House Revenue Committee voted it down.  Two Democrats on the panel, Rep. Frank Mautino (76th District) and Rep. Michael Zalewski (23rd District), helped defeat the measure.

Both are allies of House Speaker Michael Madigan, whom many hold responsible for Springfield’s inability to address the fiscal crisis in a balanced manner.

Sanford said a poll by Public Policy Polling showed nearly 80 percent of Illinois voters back legislation requiring publicly-traded corporations to disclose Illinois income tax payments.

Fair Economy Illinois also advocates closing several major corporate tax loopholes, including following the lead of other states by decoupling from the federal accelerated depreciation deduction, which would generate over $400 million a year. and eliminating a sales tax break for big box retailers, which could raise $115 million a year.

 

For more on those tax breaks, see last year’s Newstip, What corporate loopholes cost Illinois.

Also related:

In Springfield, no solutions

To fix state budget deficit, flip the tax burden

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