Study: Corporations skimp on state, local taxes
DuPont, among others, paid no net state income tax over a full three-year period, according to the ITEP report.
Steve Chiotakis: A new study out today shows some of the nations biggest corporations haven't been paying much in state and local taxes. The study's authors include a couple of non-profit organizations that are pushing for a more progressive tax code. Matt Garner is the executive director of Institute of Taxation and Economic Policy. He's here with us now to talk about this from Washington. Hey Matt.
Matt Gardner: How are you doing?
Chiotakis: I'm doing well. How are these big companies avoiding state and local taxes? What are they doing to get out of it?
Gardner: Well, there are a couple of things. One is that state lawmakers, of course, are enacting tax breaks. But really the pernicious thing we're finding here is that big companies are finding ways to create their own tax loopholes. Put another way, lawmakers aren't doing this, the companies are doing it for themselves.
Chiotakis: The companies are doing it for themselves. Do they have some sort of, like a direct line to the state capitols though?
Gardner: Oh, absolutely. We know that state lawmakers, who are obviously creating jobs, have been enacting a lot of pretty poorly thought out tax breaks to try to create them.
Chiotakis: Now these are companies though -- as you say, the lawmakers want these companies to create jobs and they are indeed big economic spenders and drivers for these states. So, I mean, what do you say?
Gardner: Well, yes. Absolutely, lawmakers should be concerned with creating a good economic climate. But, cutting corporate at the state level is a really inefficient way of doing this. If you're going to cut corporate taxes, you're going to have cut education spending to pay for it or hike taxes on everybody else. And it's not at all clear -- when you think about it that way -- that this helps anybody.
Chiotakis: Matt Garner, executive director of the Institute of Taxation and Economic Policy. Thank you Matt.