It's an election year in the United States of America, which typically means a number of trends emerging in the run up. One of these is how presidential candidates discuss taxes and for today's article, corporate taxes. Last night at the University of Buffalo, Senator Bernie Sanders said: "Over the years Verizon has made billions of dollars in profit, but in a given year has not paid a nickel in taxes." The Sanders campaign has earmarked Verizon Wireless as the third biggest tax evader in America. The same team also claim that Verizon has almost $2 billion in offshore tax havens so as to avoid paying income tax, which would amount to over $600 million.
Sanders' statement is arguably more about promoting a reform of corporate tax rather than an attack on Verizon because they are Verizon. Nevertheless, America's largest wireless carrier isn't taking this lying down: today it has published a blog post on the matter, which opens by stating that Sanders is "dead wrong on this issue." Verizon reposted a statement from Mark Mullet, Verizon's vice president of Federal Government Relations. Verizon's take on the matter is that any tax reform is far too significant and important a matter to be "influenced by a continued campaign of misinformation." Mark stated that Verizon paid $15.6 billion in taxes in the 2014 and 2015 tax years.
The misinformation that Verizon is talking about is something the carrier is attempting to put right. The blog on the matter explained that the carrier complies with all tax laws and pays all owed taxes. For 2015 this was over $8.4 billion, whereby $5.3 billion represents income taxes (net of any refunds the company received). $1.3 billion of this represented employment taxes and the remainder consists of property and other taxes. 2014's tax bill amounted to approximately $7.2 billion. The carrier also stated that in these two tax years it also invested nearly $35 billion bringing broadband and wireless services. The blog also says: "There is wide bi-partisan agreement in Washington that the tax code is broken and needs to be fixed so that all Americans might benefit. Verizon agrees."
The blog goes on to crititize the US corporate tax regime, explaining that there are too many loopholes and these result in North American companies being uncompetitive in the world today. Verizon also explained that these tax loopholes result in "inversions," which is a means for a North American company to rebase its headquarters overseas through corporate acquisition. Essentially, companies become targets for overseas businesses, which allows them to move headquarters to another location with a lower corporate tax rate. Verizon is using its blog to promote the move to encourage the US government to reduce the corporate tax rate and in doing so, to make North America a more competitive corporate environment for businesses.
For Verizon, Sanders' comments come at a difficult time because around 40,000 employees were preparing to strike today, Wednesday. The Communications Workers of America said earlier in the week: "Even though Verizon made $39 billion in profits over the last three years – and $1.8 billion a month in profits over the first three months of 2016 – the company wants to gut job security protections, contract out more work, offshore jobs to Mexico, the Philippines and other locations and require technicians to work away from home for as long as two months without seeing their families. Verizon is also refusing to negotiate any improvements in wages, benefits or working conditions for Verizon Wireless retail workers, who formed a union in 2014." If these employees walked out, it would be the largest strike in the United States since 2011.