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Corporations should honor full tax burdens
Published 7:59am Wednesday, March 9, 2011
For decades, Alabama Democrats made sure our state had the lowest taxes in the nation. We collected less state and local taxes per person, and therefore we made sure every dollar of revenue was used wisely and effectively.
Even though we budgeted as diligently as we could, the recession devastated our education and general fund budgets. The economic downturn has caused a loss of one-quarter of all school funding. There are even more losses in the fund that pays for things like public safety and healthcare.
Last week, Gov. Bentley presented his budgets, and he seems to be trying to make the best of a bad situation. He was able to prevent any teacher layoffs paid by state funds, yet the budget is insufficient to prevent layoffs of locally funded teachers. More than likely, hundreds more teachers will be laid off, joining the thousands we have already lost during these tough times.
We shouldn’t have to lose one teacher or cut our schools. We simply need to stop out-of-state corporations from making fools out of us in Alabama. Even though we are the lowest taxed state by far, there are companies and even whole industries, which use gimmicks and tricks to pay less in income taxes than one single teacher.
How bad is it? According to Alabama Department of Revenue figures, over one thousand out-of-state corporations doing business in Alabama made $105 billion in 2005. Yet, they paid nothing in state income taxes. You read that right, zero taxes. By using shell games, finding loopholes or simply waiting to see if a state auditor would check, these corporations, many household names, pay nothing while working people pay their fair share.
To make things worse, these kinds of tax shell games put our own local small businesses at risk. When a major company is able to skip on paying taxes it puts local small business competitive advantage. Since every penny of state income and sales taxes are earmarked for schools, shell games are also stealing funds that would keep teachers in the classroom and out of the unemployment line.
We are not talking about raising taxes, just trying to stop big corporations from mocking state law and the citizens of our state.
For years, Alabama Democrats have been working to close the loopholes and stop the abuses of these big corporations. A few years back we closed a gimmick where companies took huge deductions by paying rent to themselves.
Now we’re finding out new shell games are being used skirting the law we just passed. That’s what happens when they have an army of lawyers and accountants.
As legislators, we are supposed to represent citizens and communities. It is up to the new Republican leadership in the Legislature to pick which side will win—Alabamians or big corporations.
It is wrong for us to fire a teacher or cut the classroom when companies like BP or Exxon pay little or nothing in state income taxes after making millions here. It is unconscionable to deny care to a senior citizen when tobacco companies or major retailers thumb their nose at our laws.
Alabama has the lowest taxes in the nation. It seems that many big businesses think that means that they need not pay anything at all.
Johnny Mack Morrow is a state representative for Franklin County. His column appears each Wednesday.
