New York should raise needed revenue and restore fairness to the tax code by reforming our state corporate tax structure and closing a variety of corporate tax loopholes to make sure small business and big business play by the same rules, and that higher profits are taxed at reasonably higher rates.

Last year’s effort to make the PIT more progressive and more fair should continue in 2012 by reforming corporate taxes to close loopholes, end costly and ineffective tax subsidies, and fix shortcomings that unnecessarily reduce tax collections and limit resources needed to maintain and invest in the infrastructure, services and educated workforce that foster long-term economic growth.

From the press release:

A recently released report from Citizens for Tax Justice and the Institute on Taxation and Economy Polciy entitled, ‘Tax Dodging in the 50 States,’ found that many highly profitable companies are paying very little in state corporate income taxes throughout the country. The report also shows that many NYS based companies like Travelers, American Express, Verizon, Goldman Sachs and Rupert Murdoch’s news Corporation are paying a lower tax rate than the average New York family of four with an income of $58,000 a year.

A broad ranging coalition of community, labor, faith and Occupy groups have a plan to reform New York’s corporate tax structure that is focused on three main principles: enforcement, fairness, and transparency. The plan includes:

• Requiring real estate partnerships to pay the taxes they owe
• Reforming New York’s Corporate Alternate Minimum Tax
• Taxing nonresident hedge fund management fees
• Eliminating the Carried Interest Exemption under New York City’s Unincorporated Business tax
• Cracking down on schemes that create “nowhere income”
• Requiring public disclosure of corporate tax payments for publicly-traded companies

Click here to see our photo gallery from the event

The Verizon Corporation has been identified as one of the country’s worst tax evaders, paying no corporate taxes while having made over $32.5 billion in profits between 2008 and 2010, and receiving a $951 million tax rebate from the federal government.

In fact, they’ve spent more money lobbying than they have paid in taxes. Billions more, actually.

If Verizon CEO Lowell McAdams cheated in a game of poker, he’d forfeit his chips. If he cheated on a spelling test, he’d get an automatic F. If he cheated in a baseball game, he’d lose by default. If he cheated on his significant other, he’d be single. Why, then, is Verizon permitted by law to what amounts to cheating on their taxes?

A government should represent the people. Instead, our government represents a super-wealthy minority with the financial means to control an entire nation’s political process. We can thank our current campaign finance system for bloated corporations like Verizon (remember when they tried to force those concessions on their employees?), and the wealth disparity they have created.

Corporations like Verizon lobby for tax loopholes that let them dodge their taxes. This leaves them with mountains of extra cash, which they use to buy candidates. Because of our current political climate, candidates can’t afford not to sell their campaigns to corporations. Verizon CEO Lowell C. McAdam knows very well that if a politician hopes to compete in an election, they have to accept his massive donation. That candidate effectively becomes Lowell’s lap dog, cementing loopholes that allow massive corporations to continue evading taxes.

Public financing of elections would work to fix this. A candidate in a publicly financed election would not have to bow to pressure from big donors. Lower contribution limits and better enforcement would take big money’s influence out of politics.

To quote President Obama’s State of the Union, we “can either settle for a country where a shrinking number of people do really well, while a growing number of Americans barely get by — or we can restore an economy where everyone gets a fair shot, everyone does their fair share, and everyone plays by the same set of rules.”

Until we take the money out of politics, corporations like Verizon will continue to enjoy sweetheart deals and tax loopholes, while the gap between rich and poor continues to grow.

Sign our petition that we made today, urging Verizon to pay their fair share of taxes.

For more information on closing corporate tax loopholes, click here.

For the policy wonks among us, here’s some detail about the plan.

Click here to download this information as a PDF fact sheet.

Closing Corporate Tax Loopholes & Reforming the Corporate Income Tax

New York should raise needed revenue and restore fairness to the tax code by reforming our state corporate tax structure and closing a variety of corporate tax loopholes to make sure small business and big business play by the same rules, and that higher profits are taxed at reasonably higher rates.

Last year’s effort to make the PIT more progressive and more fair should continue in 2012 by reforming corporate taxes to close loopholes, end costly and ineffective tax subsidies, and fix shortcomings that unnecessarily reduce tax collections and limit resources needed to maintain and invest in the infrastructure, services and educated workforce that foster long-term economic growth.

Reform Principles: Enforcement, fairness and transparency

Targets: Corporate tax evaders, real estate partnership abuses, hedge funds income treatment

Methods: Tough Audits, reasonable minimum tax for big business, eliminate hedge fund subsidies, mandatory tax reporting for public companies

A simple, targeted corporate tax reform effort would provide over $1 billion in revenue for this year’s state budget, and provide a start for the Tax Reform and Fairness Commission to continue reforms.

Enforcement

Require Real Estate Partnerships To Pay The Taxes They Owe

New York must undertake a new intensive review of the tax returns of investors in real estate partnerships to ensure compliance with tax laws. In an examination of just one year’s tax returns (2005), IRS staff estimated that real estate investors underpaid $5 billion in taxes to the federal government and $385 million to New York State.

Underreporting or misreporting of capital gains from real estate investments is the main cause of tax underpayments. Reuters columnist David Cay Johnston, who reported the 2005 IRS data when he wrote for the New York Times, recently wrote that the annual underpayment of New York State taxes in connection with real estate partnerships ranged from $200 to $700 million annually. Johnston also pointed out that New York City alone could be losing out on $40 million annually.

New York could recover as much as $1 billion from prior-year audits, with annual revenues thereafter well over $100 million. The state of Pennsylvania recently recaptured over $700 million by making sure that the investors in Real Estate Partnerships paid the proper taxes on their overall gains.

Fairness

Reform New York’s Corporate Alternate Minimum Tax (AMT)

Several significant loopholes that favor multi-state corporations were added to New York’s Corporate AMT beginning in 1994 and the AMT rate was cut from 3.5% to 2.5% in 1999 and then to 1.5% in 2005 for non-manufacturers and most recently .75% for manufacturers (manufacturers rate was recently changed in the tax reform package of December 2011).

These changes should be repealed or the AMT should be replaced with a variation of the Alternative Minimum Assessment (AMA) adopted by New Jersey in 2002. To ensure that such an assessment would not hurt small business, it should only be applied to businesses with annual gross profits of $5 million or more.

We need to level the playing field between large and small businesses by making sure that large multinational corporations pay a minimum corporate income tax in NYS. NYS should increase the Corporate AMT to where it was a decade ago (3.5%) which would generate hundreds of millions in additional revenue.

Tax Nonresident Hedge Fund Management Fees

In his 2010 Executive Budget proposal, Governor Paterson proposed to “expand the nonresident personal income tax to include income received from hedge fund management fees.”

As the governor’s proposal explained, “Currently, only a small portion of such income is taxed as compensation, with the remainder deemed taxfree capital gains. This proposal would result in equal treatment of this income for residents and nonresidents.” This proposal would generate $50 million in additional revenue.

Eliminate the Carried Interest Exemption Under New York City’s Unincorporated Business Tax

The State Legislature should eliminate the carried interest exemption loophole in the New York City Unincorporated Business Tax, to put the taxation of private equity and hedge funds on the same footing as that of thousands of smaller businesses.

Right now, the City Unincorporated Business Tax taxes fees received by managing partners in private equity and hedge funds but actually exempts profits from taxation. “Carried interest” is the technical industry term for the profit share received by managing partners (usually 20 percent of pooled investment profits) in hedge funds – anyone else would call it corporate profits.

The New York City Independent Budget Office estimated that eliminating the carried interest exemption for the Unincorporated Business Tax would yield $200 million a year for New York City. This reform was recently supported by Mayor Bloomberg.

Transparency

Crackdown on Schemes that Create “Nowhere Income”

Multi-state corporations pay no taxes on profits attributable to sales made in states in which they do not have a physical presence. To address this situation, 28 of the 45 states with corporate income taxes, including California, Texas and Utah have enacted “throw-back” or “throw-out” rules to limit this drain on state revenues.

In contrast, New York actually went backwards on this issue in 2005, instituting a wasteful “Single Sales Factor” method for apportioning multi-state corporate profits that actually increase “nowhere income” and opportunities to evade taxes. It’s time to institute reforms that have worked for other states.

Require Public Disclosure of Corporate Tax Payments for Publicly-Traded Companies

Revenue neutral, but disclosure and transparency measures are a good addition to any corporate tax reform package. We urge the state to adopt corporate tax disclosure for publicly traded firms subject to taxation under 9-A and 32 and any successor taxes.

These and other corporate tax reforms are supported by a broad range of community, labor, student, faith and Occupy groups from across New York – for more information visit 99PercentNY.org.

In response to the economic plan announced today, Karen Scharff, Executive Director of Citizen Action of New York said:

After several years of devastating budget cuts to schools, services, and our safety net, Governor Cuomo today responded to a strong movement of concerned New Yorkers by working with Speaker Silver to produce a new, more progressive tax system that will turn our state’s economy back in the right direction and create desperately needed jobs.

Citizen Action applauds this progress, but more needs to be done. Our 20,000 members will continue to organize for economic justice for the 99%, including working to solve the remaining state budget deficit by closing corporate tax loopholes and through other revenue raising measures, not more budget cuts. New York State’s economic problems are far from over. Corporate tax reform is the most important, and most rational, next step in creating a more fair New York.

Top 1% Concentrated in Manhattan and NYC Suburbs; Millionaires Less Than .1% In Upstate and Outer Boroughs; $5B tax cut for “Mostly Manhattan Millionaires”

New analysis* of the state’s most recent public tax data by the Center for Working Families shows that those who make $1 million or more a year disproportionately live in Manhattan, Westchester and Long Island, with very few millionaires living in regions across Upstate New York or in the outer boroughs of New York City.

“It turns out that Albany lawmakers are cutting schools, local governments, human services and colleges statewide – all to give a $5 billion tax cut to mostly Manhattan millionaires,” said Jim Anderson, Vice President of Citizen Action of New York. “It just doesn’t make sense for Buffalo.”
Of 32,810 New York tax filers who earned more than $1 million a year in the latest public records, 13,818 live in Manhattan – or 42% of all the state’s millionaires. Another 6,644 live on Long Island and 6,679 live in Westchester or Putnam Counties. In total, 83% of all million-a-year tax filers in the state live in one of these three regions.

Yesterday will go down in history.

Yesterday will be remembered as the moment when New York’s true majority built upon two months of momentum and brought the battle directly to our lawmakers.

We walked with our labor and community allies to deliver hundreds of vocal members of the 99% to the State Capitol to put our message directly into the hands of New York’s Governor and Senate.

Our friends from across New York State arrived on buses in droves – from Binghamton to Buffalo – to demand change to a flawed system that benefits the super wealthy, corporations, and banks at the expense of everyone else.

More specifically, we went out to draw attention to the fact that on December 31st, the current tax surcharge for individuals earning more than $200,000 a year or families earning $300,000 a year is set to end. This will amount to a $5 billion dollar loss in revenue for New York State, which is already in desperate need of money:

• School cuts have eviscerated public education and closed doors to successful futures for our kids.
• Thousands of families are being evicted from their homes.
• Senior citizens, disabled people, working families, and the sick are unable to afford health care.
• High risk homeless and low income people are not able to afford basic meals.

We also gathered in solidarity with other Occupy movements across the nation that have been facing mass arrests and extreme opposition from the 1% – cities like Oakland, Rochester, and New York.

In Lafayette Park, we converged to discuss our goals as a movement and deepen the sense of unity between everyone. Many different progressive organizations were present, from labor groups like the Public Employee Federation to Save Our SUNY, Citizen Action of New York, Push Buffalo, and Metro Justice.

After our initial rally, we marched to the Business Council of New York, just down the block from Lafayette Park. There, with hundreds of people walking down Albany’s busy Washington Avenue, waving flags, banners, signs, and chanting and using noisemakers (and the contingent of press and reporters following us), we delivered a message to acting-President Heather Briccetti and the Committee to Save New York that we would not stand idly by as they forced their self-serving agenda on us.

From there, we marched to the Capitol where we delivered petitions to Governor Cuomo and presented the People’s Resolution to the New York State Senate’s Sergeant-at-Arms. Written on a scroll much like the US Constitution, this resolution outlines why the millionaires’ surcharge should be extended. Reasons include:

• 795,000 people currently out of work in New York State
• 100,000 jobs recently being cut from the public sector
• The current 2011 budget deficit of over $350 million (with next year’s deficit projected to be $3.5 billion)
• Vast income inequality, with 67 billionaires in New York having a combined net worth of over $234.9 billion while millions of other New York residents are forced to face tax cuts and concessions

The day of action culminated with a final session of cheer, chants, support, and unity between demonstrators. Below, you’ll find a list of press from the event:

Press Clips

We’ll update the list as we find more articles.

How can you justify using the term shared sacrifice while giving New York’s wealthiest a $5 billion tax break? 

Millionaires don’t need the tax cut. The money can be invested in infrastructure, transit, energy efficient retrofits, and conservation projects. This would create hundreds of thousands of jobs that we desperately need.

After Wall Street destroyed the economy, State and city politicians cut from students, senior citizens, lower income people, disabled people, and homeless people. These cuts have led directly to the loss of over 100,000 public-sector jobs, and thousands more at non-profits and local businesses. If we stop the tax cut for the rich, we can restore the worst of the cuts.

Almost three quarters of New Yorkers support a tax on millionaires. It’s time.

Today, community leaders, labor organizations, activists, and concerned citizens converged at the state capitol to call on elected officials to prevent the proposed millionaires’ tax break. Organizations represented included New Yorkers for Fiscal Fairness, GrowingTogetherNY, the Strong Economy for All Coalition, Alliance for Quality Education, Citizen Action of New York, 1199 SEIU, NYSUT, the Capital District Area Labor Federation, Save Our SUNY, Upper Hudson Planned Parenthood, Statewide Senior Action Council of NYS, Empire Justice Center, supporters of SNUG, Coalition for the Homeless, and the Fiscal Policy Institute.

Here’s a video of Citizen Action of New York’s board president Ivette Alfonso speaking at the press conference:

For the full text of the press release, click here

Press Coverage

The “Emergency Jobs to Restore the American Dream Act,” sponsored by the Illinois Democrat, would create more than two million jobs during the next two fiscal years. Jobs would be created in the areas of education, health care, infrastructure and a “Neighborhood Heroes Corps,” which would promote hiring of teachers, police officers and firefighters. In addition, it would create jobs for youth and college students in a Park Improvement Corps and a Student Jobs Corps.

“We built the middle class by decisions we made together, as Americans,” said Alan Charney, USAction director of strategy and policy. “But today, working and middle-class families are struggling, while the rich get richer and at the expense of the rest of us. It’s up to us to fight for good jobs, strong communities and shared prosperity. Congresswoman Schakowsky’s bill will put America back to work.”

Charney noted that the Emergency Jobs legislation not only targets unemployed Americans, but particularly those who have exhausted their unemployment insurance – the so-called “99ers.”

The Schakowsky plan is based on five key elements:

 1) Increased economic stimulus to spur growth in the immediate term

2) Smart, targeted spending cuts

3) Mandatory spending cuts

 4) Reductions in tax expenditures

 5) Increases in revenues

Click here for a more in depth explanation of the bill.

From the Ithaca Journal:

On the English/language arts test, 52.8 percent of all students met or exceeded the standard, down from 53.2 percent in 2010. In math, 63.3 percent met or exceeded proficiency, up from 61 percent last year.

The figures are dramatically lower for minority students: 35 percent of blacks and 37.2 percent of Hispanics hit or exceeded English standards, and 44 percent of blacks and 50.2 percent of Hispanics met or exceeded math standards.

Just 12.6 percent of students whose first language is not English passed the English test and 32.3 percent met or exceeded standards in math. For students with disabilities, 14.5 percent passed the English test and 26.9 percent were proficient in math.

These are dismal figures. Basically, half of our students are not meeting their English proficiency standard. And although the levels for Math are a little better, roughly four out of every 10 students are still not meeting the state standard.

Even more disturbing, minority students, disabled students, and students with a first language other than English are continuing to perform markedly worse than their classmates. As long as the income gap between affluent and lower-income communities continues to grow, we can only expect this trend to continue.

Our Executive Director, Karen Scharff, issued a press release regarding the figures:

“The statewide test scores released today, by the State Education Department, show that New York State is failing to prepare many of our students for college or careers. The racial achievement gap and the continued deferment of CFE are especially alarming. Next month, many public school students, from Buffalo to Long Island, will find their schools closed, their teachers gone, or successful programs such as after school, tutoring and advanced placement courses eliminated. These impacts are a direct result of the decision to give a multi-billion tax dollar cut  to the richest New Yorkers. The Governor and the Legislature can help our students succeed by renewing the tax before it expires on December 31, 2011, and restoring school funding to improve education for our 2.7 million schoolchildren.”

New York State is cutting necessary education programs from kids, compromising their chances of attending college and finding gainful employment. They are doing this while simultaneously giving tax breaks to millionaires, billionaires, and corporations. What’s wrong with this picture? We need to protect our kids, not New York’s richest two percent!

Want to join the fight to put the needs of kids first? Visit AQE’s website or email info@aqeny.org to get involved.