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Senate Ways and Means Votes to Cut Business Taxes While State Struggles to Fund Critical Needs

CONCORD, NH – The Senate Ways and Means Committee today approved two separate bills that together would reduce business tax revenue by tens of millions of dollars at a time when the state is struggling to fund public services vital to New Hampshire’s economic future.

SB 1, which would lower the business profits tax (BPT) rate, and SB 2, which would lower the business enterprise tax (BET) rate, together likely would reduce state revenue by nearly $70 million on a biennial basis once fully phased in.

“The Committee’s action today shows where the Senate leadership’s true priorities lie,” said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute. “Rather than wait until it has developed a budget that ensures New Hampshire can continue to invest in higher education and other services that foster growth, the Senate now seems poised to put costly and ineffective business tax breaks at the head of the line.”

The committee amended both bills to extend the period over which they will be implemented with both taking full effect in 2020.

“Making these tax cuts more gradual does not make them any more affordable over the long run,” said McLynch. “It simply puts off the day of reckoning without a plan for how future budgets will accommodate the loss in revenue.”

New Hampshire’s revenue system has yet to fully recover from the national recession of 2007 through 2009. At the close of FY 2014, General and Education Fund revenue amounted to $2.17 billion. After adjusting for inflation, that sum is approximately 12 percent or roughly $290 million less than what the state collected from the same sources in FY 2008. Between FY 2008 and FY 2014, the combination of the BPT and BET, after adjusting for inflation, has dropped almost 20 percent or just over $136 million.

McLynch provided testimony outlining the shortcomings of proposed business tax cuts at the Senate Ways and Means Committee’s January 20 public hearing. The testimony is available online.

The New Hampshire Fiscal Policy Institute is an independent, non-profit, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.

SEN. Martha Fuller-Clark: Corporate Tax Cuts: The Solution in Search of a Problem

When you’ve spent as much time in the New Hampshire legislature as I have, you are used to seeing solutions proposed to problems yet to arise. This session is no exception. Currently, Senate Bills One and Two are pending in the Senate championed by some as needed to enhance our business climate.

While these bills would modestly reduce taxes on a very small percentage of New Hampshire’s businesses, they would blow a major hole in the state’s budget for the next two years – a budget that is already significantly challenged – and limit our ability to provide the vital investments that businesses have told us they want and need in order to continue to thrive in our state. 

Proponents of these bills believe that our current business climate – routinely ranked in the top ten in the country for attracting, growing, and creating new thriving businesses – needs fixing. They think that the only improvement in that climate our state government can offer is a reduction in taxes businesses pay. Yet any survey of the way that site selection professionals chose locations for new facilities makes clear that, while taxation levels are a consideration, they are an increasingly minor one. 

Area Development, a leading trade publication for industrial real estate professionals for over fifty years, published a comprehensive 10-part series in the fourth quarter of 2014 based on their 28th annual survey of corporate executives.[1]The results will not surprise anyone who has worked with economic development professionals, business leaders, and industrial realtors. Taxes are important, but other factors have long-since eclipsed tax rates as the leading priorities for businesses looking to expand. 

The top six factors cited in the Area Development survey all reflect priorities that Gov. Hassan stressed in her inaugural address and that Democrats agree need to be adequately funded in order to actually improve our business climate. These include a more market-ready workforce by making higher education more flexible and more affordable (Factors 1[2] and 3[3]), improved transportation infrastructure (Factor 2[4]), and a “robust” information and communications technology infrastructure (Factor 5[5].) Factors 4[6] and 6[7] both concern the price and cost of physical plants and turnkey facilities, variables that the State of New Hampshire could help address if more financial resources from the state were allocated to help communities lower their property taxes. 

The survey goes on to address the impact of state and local taxation, citing it as the seventh most important factor.[8] The discussion of the impact of taxes is mitigated, however, by the understanding that states with extremely low taxes often cannot supply crucial services. Area Development quotes Larry Gigerich, managing director of the site selection firm Ginovus:  

“We talk to C-suite people who say that we’ve hit a tipping point on corporate taxes now because of examples like Kansas. They’re saying that there are basic services that governments provide, and if states cut taxes too much, they don’t have the revenue to do it. They want states to be able to pay for services and infrastructure and workforce development.” (Emphasis mine) [9]

Meanwhile, New Hampshire continues to attract new businesses like Albany International and Revolution Energy, both here on the Seacoast, as well as grow existing ones, both large and small.  The right-wing Tax Foundation, who lauds Rep. Paul Ryan (R-WI) and Gov. Mike Pence (R-IN) on their  blog’s front page[10], rates New Hampshire seventh in their annual State Business Tax Climate Index for 2015, continuing its long run in the top ten states for business climate based on taxes.[11] The Tax Foundation has consistently found New Hampshire to have one of the most attractive tax climates in the US, notably throughout the terms of Democratic governors Shaheen, Lynch, and Hassan. 

It is important to note the number of companies that would benefit from SB1 and SB2. Three out of every four businesses in New Hampshire (75.7%) currently pay no taxes under the business profit tax (BPT) that would be cut under SB1 while almost half (43.9%) of New Hampshire businesses pay no taxes under the business enterprise tax (BET) that would be cut by SB2. Another 10.9% pay less than $1000 and would surely be unaffected by the SB1 cuts. Another one in three businesses pay less than $1000 under the BET and would see no benefit in the reduction proposed by SB 2. Altogether, fewer than 17,000 businesses out of the more than 120,000 businesses registered in the state paid more than $1000 dollars in business taxes in 2011 and might see some tax relief. [12] 

Clearly the impact on the business climate of tax cuts proposed in SB1 and SB2 would be almost de minimus, while the loss of revenue to the general fund, projected to be  $78,008,824[13] over the next two years, would be significant to an already cash strapped budget. This would mean less support for higher education and local schools, including school building aid, fewer miles of roads paved and red lined bridges repaired to name but a few of the services so essential to a healthy business climate and a thriving economy.  Creating a well-educated and skilled workforce, investing in a well maintained and modern infrastructure, including available and effective broad-band and cloud service and ensuring a safe and healthy environment will have a far more positive impact on our business climate than any small tax cut offered by SB1 and 2 – a tax solution to a potential  problem that, in reality, despite the rhetoric, will only affect a very small number of large and successful businesses. More importantly, we should listen to business professionals and prioritize our economic development strategies accordingly.

[1] http://www.areadevelopment.com/Corporate-Consultants-Survey-Results/Q1-2014/28th-Corporate-Executive-RE-survey-results-6574981.shtml

[2] http://www.areadevelopment.com/skilled-workforce-STEM/Q4-2014/skilled-labor-critical-site-selection-factors-7221554.shtml

[3] http://www.areadevelopment.com/labor-costs/Q4-2014/labor-costs-critical-site-selection-factors-272611.shtml

[4] http://www.areadevelopment.com/logisticsInfrastructure/Q4-2014/highway-accessibility-critical-site-selection-factors-700913.shtml

[5] http://www.areadevelopment.com/logisticsInfrastructure/Q4-2014/critical-site-selection-factors-ICT-infrastructure-2929217.shtml

[6] http://www.areadevelopment.com/construction-project-planning/Q4-2014/site-selection-factors-occupancy-construction-costs-282721.shtml

[7] http://www.areadevelopment.com/economic-analysis/Q4-2014/building-availability-critical-site-selection-factors-398297.shtml

[8] http://www.areadevelopment.com/taxesIncentives/Q4-2014/corporate-tax-rate-critical-site-selection-factors-222449.shtml

[9] ibid, note 8

[10] http://taxfoundation.org/blog

[11] http://taxfoundation.org/article/facts-figures-2014-how-does-your-state-compare

[12] http://www.revenue.nh.gov/publications/reports/documents/ar-2014.pdf (see alsohttp://www.revenue.nh.gov/publications/presentations/documents/senate-ways-means-present-2015.pdf for recent revenue history of BET, BPT.

[13] Fiscal Notes for SB1 and SB2 http://www.gencourt.state.nh.us/bill_status/bill_status.aspx?lsr=189&sy=2015&sortoption=&txtsessionyear=2015&txtbillnumber=SB1

http://www.gencourt.state.nh.us/bill_status/bill_status.aspx?lsr=868&sy=2015&sortoption=&txtsessionyear=2015&txtbillnumber=SB2

These are the stakes…To make a world in which all of God’s children can live, or to go into the dark. We must either love each other, or we must die. LBJ, 1964

Capital Gains Proposal Would Generate New Revenue While Reducing Property Tax for Thousands

CONCORD, NH – The House Ways and Means Committee today held a hearing on a proposal that would both raise needed revenue for the state and begin to address the lack of equity in its tax system. HB 634 would expand New Hampshire’s existing interest and dividends tax to include capital gains, generating nearly $100 million in new revenue each year once fully implemented.

While bolstering the resources available for the FY 2016-2017 budget, the proposal would also reduce the taxes paid by everyday Granite Staters. It would increase the basic exemptions within the interest and dividend tax and update the Low and Moderate Income Homeowner Property Tax Relief Program to ensure more individuals and families can access rebates through the program. Additionally, the proposal allocates the first $25 million in revenue to restore dedicated revenue sharing with cities and towns, reducing pressure on local property taxes.

“This proposal would close a gap in New Hampshire’s existing tax system and allow the state to make important investments in education, public safety, and other services that support working families and strengthen the Granite State economy,” said New Hampshire Fiscal Policy Institute Executive Director Jeff McLynch in his testimony before the committee.

“Most New Hampshire residents would see no change in the taxes they pay if this proposal became law, but everyone would see greater support for the services they count on state government to provide,” added McLynch. “Of those who would pay a different tax bill, many more would receive a tax cut than would experience a tax increase.”

New Hampshire has historically relied on taxes on property, the sale of property, and the income some property produces to help finance public services. Yet, New Hampshire currently excludes from taxation the income received from the sale of stocks and other assets, known as capital gains. IRS data show that 88 percent of all taxable capital gains reported in New Hampshire in 2012 accrued to taxpayers with incomes over $200,000; taxpayers with incomes of over $1 million accounted for 66 percent. As a result, 98 percent of the revenue generated by HB 634 will come from the top 20 percent of income earners in the state.

Due to a variety of factors, New Hampshire’s revenue system has yet to fully recover from the national recession of 2007 through 2009. At the close of FY 2014, General and Education Fund revenue amounted to $2.17 billion. After adjusting for inflation, that sum is approximately 12 percent or roughly $290 million less than what was collected from the same sources in FY 2008.

The New Hampshire Fiscal Policy Institute is an independent, non-profit, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.

AFT-NH Legislative Update 2-3-15: Kicking Off The Session

AFT NH Legislative Update

The 2015 session of the NH State legislature is underway and as always, there are many bills to follow and monitor.  Some legislative proposals will garner our support but others will earn our enmity and opposition as we defend the interests of our members and of working people in New Hampshire.  As we review proposed bills, we will determine our support or opposition based upon the basic legislative objectives listed below:

Education

  • AFT-NH will stand up and fight for neighborhood public schools that are safe, welcoming places for teaching and learning.
  • AFT-NH will stand up and fight to ensure that teachers and school staff are well-prepared, are supported, have manageable class sizes, and have time to collaborate so they can meet the individual needs of every child.
  • AFT-NH will stand up and fight to make sure our children have an engaging curriculum that includes art, music and physical education

Retirement

  • AFT-NH will stand up and fight for universal access to secure retirement plans into which the state of NH and its cities and towns pay their required yearly contributions.
  • AFT-NH will stand up and fight to ensure all workers are covered by retirement plans that provide consistent and adequate income to maintain a reasonable standard of living.
  • AFT-NH will stand up and fight to ensure earned retirement benefits are fully funded and safeguarded from market volatility or changes in employers’ economic situations.

Public employees

  • AFT-NH will stand up and fight for first-rate public services that support communities and keep them safe, healthy and vibrant.
  • AFT-NH will stand up and fight to ensure public employees are well-prepared and supported so they can provide the high-quality services our communities depend on.

Collective bargaining

  • AFT-NH will stand up and fight for collective bargaining laws in the state of NH and will work to defeat any and all legislation that either erodes or repeals NH’s collective bargaining laws for public employees.

Revenues

  • AFT-NH will stand up and fight for incremental, common-sense reforms designed to make NH’s existing tax system fairer and to produce the revenue needed to preserve the public services essential to NH’s residents, businesses, and visitors, and vital to our shared economic success.

Charter Schools Accountability

  • AFT-NH will stand up and fight for laws and regulations requiring full transparency in how charter schools operate and making them directly and openly accountable to the public for student performance and their admissions and enrollment policies.  We need stronger policies mandating respect and support for teacher and staff voices in school policy and program, identification of potential conflicts of interest via disclosure requirements, and the use of public funds in the same rigorous manner required in our public schools.

So far this session the House Education Committee heard testimony on HB 116: relative to the renomination of teachers. This bill reduces from 5 to 3 consecutive years of teaching required for a teacher to be entitled to notification and a hearing if the teacher is not reappointed. This bill would falls under our objective of “AFT-NH will stand up and fight to ensure that teachers and school staff are well-prepared, are supported, have manageable class sizes, and have time to collaborate so they can meet the individual needs of every child.”

AFT-NH believes that all teachers deserve due process when being non-renewed.  Due process is the right to a legitimate reason, or “just cause,” before a teacher can be fired and requires a notice and an impartial just cause hearing before termination. We are asking to be treated fairly and without prejudice.

A Red Issue Alert went out this week about the above bill and if you have not taken action there is still time by clicking here.

They are also many bills moving through both chambers in regards to Common Core and state assessments. These bills would fall under the objective of; “AFT-NH will stand up and fight to make sure our children have an engaging curriculum that includes art, music and physical education.”

If these Standards and assessments are to work we need to ensure that in each district the following are in place when implementing the Standards:

  • There needs to be planning time for understanding the Standards and time to put them into practice,
  • We need opportunities to observe colleagues implementing Standards in class,
  • We must provide teachers with model lesson plans aligned to Standards,
  • We need to ensure textbooks/other curricula materials align with Standards,
  • We must communicate with parents on the Standards and the expectations of students,
  • We must develop best practices and strategies along with coaching to help teachers teach content more deeply,
  • We need to ensure all districts have the equipment and bandwidth to administer computer-based assessments,
  • We need to make sure we have fully developed curricula aligned to Standards and available to teachers,
  • We must be certain that assessments are aligned to Standards indicating mastery of concepts,
  • We need to have professional development and training in the Standards, and
  • We need to develop tools to track individual student progress on key Standards.

With regards to assessments, AFT-NH believes in assessments that support teaching and learning, and that are aligned with curriculum rather than narrow it.  Assessments should be focused on measuring growth and continuous development of students instead of arbitrary targets unconnected to how students learn. Assessments should be diverse, authentic, test for multiple indicators of student performance and provide information leading to appropriate interventions that help students, teachers and schools improve.  Assessments should not be designed to deliver sanctions that undermine students, teachers and schools.  Development and implementation of such tests must be age appropriate for the students, and teachers need to have appropriate computers to administer such assessments.

Further, AFT-NH believes that assessments designed to support teaching and learning must contribute to school and classroom environments that nurture growth, collaboration, curiosity and invention—essential elements of a 21st-century education that have too often been sacrificed in favor of test prep and testing itself.

The Senate Finance Committee held a hearing on SB 1 reducing the rate of the business profits tax.This bill would fall under AFT-NH’s objective to “stand up and fight for incremental, common-sense reforms designed to make NH’s existing tax system fairer and to produce the revenue needed to preserve the public services essential to NH’s residents, businesses, and visitors, and vital to our shared economic success.” AFT-NH has concerns with this bill. We have heard over and over that there is a $30 million shortfall in this current budget. With a hole of $30 million why would you cut roughly another $30 million in this biennium budget? How will this amount be made up or where in the budget will cuts be made?

Keep in mind that the state of New Hampshire already underfunds catastrophic special education aid to district by capping it at 72%.  With this cap of 72% the state has downshifted roughly $8 million onto communities.  There has been a moratorium on Building aid which has hindered many districts from complete upgrades, making repairs to buildings or building new schools. Remember:  50% of our school buildings are over 60 years old and many need infrastructure upgrades necessary for a 21st century learning environment.

Lastly, what are the assurances that by reducing the business profits tax jobs would be created?  I see this as only leading to reductions in the public services that all citizens of New Hampshire rely upon.

In Solidarity,
Laura Hainey
AFT-NH President

Time to Close the State’s Tax Loopholes (Op-Ed By Rich Gulla Pres. NH SEA-SEIU1984)

HB 634First of Several Bills Aimed at Closing Tax Loopholes to Be Heard Monday

Rich Gulla President SEA-SEIU1984

Rich Gulla President SEA-SEIU1984

A recent study revealed that the wealthiest earners in our state are not paying their fair share of taxes. The top 1% income earners in the state paid an effective tax rate of 2.4%, while the lowest 20% of income earners in the state paid an effective tax rate of 8.6%. It is not hard to recognize that not everyone is paying their fair share in this equation. At the same time we continue to fall short of effectively funding critical needs like affordable higher education and maintaining our state’s infrastructure, things that help strengthen our economy and encourage economic growth.

While some New Hampshire residents are struggling to afford high property taxes, the wealthiest among us are enjoying the benefits of tax loopholes. In order to reduce property taxes, and fund the critical services of the State, State policy makers should consider closing the State’s tax loopholes.   By far the largest loophole concerns individual sales of investments and stocks. Currently, the sale of investments (called “capital gains”) by businesses is already taxed under the State business profits tax, and corporate dividends paid to individuals are taxed under the State interest and dividends tax. However, the sale of investments by individuals is not taxed at all, including stock sales and day trades on Wall Street by persons in New Hampshire.

It may come as no surprise that about two-thirds of the revenue that would come from closing this loophole would come from the top 1% income earners in the State. If this loophole were closed, and property tax relief was actually provided, we could fund critical services of the State and our system of taxation would treat the average Granite Stater much more fairly.

Some other tax loopholes should be closed as well.   In 2012, the Legislature passed – over Governor John Lynch’s veto – a loophole that allows individuals to form trusts to avoid paying the State’s interests and dividends tax.

Essentially, everyone who receives interest and dividend income pays a 5% interest and dividends tax, unless they are able to hire a lawyer that specializes in creating certain trusts, then they pay 0%. This loophole should be closed.

Lastly, some businesses don’t always pay the State’s business profits tax because their assets are located off-shore. This too should be closed.

The State is facing very difficult financial times. The average Granite Stater isn’t exploiting tax loopholes, they are meeting their responsibilities and in doing so are often struggling to pay their property taxes. It is time for State policy makers to close these loopholes, fund critical State services, and help move New Hampshire forward — for everyone, not just the wealthy.

New Report Show NH Tax Policy Hurt Low Income Families Most

New Analysis: Low-Income Taxpayers in New Hampshire Pay Three Times the Tax Rate Paid by the Wealthiest Granite Staters

CONCORD, NH – A new study released today by the Institute on Taxation and Economic Policy (ITEP) finds that the lowest income Granite Staters pay an effective tax rate that is three times that paid by the state’s wealthiest residents. The report, titled Who Pays? A Distributional Analysis of the Tax Systems in All 50 States, factors in all major state and local taxes, including personal and corporate income taxes, property taxes, sales and other excise taxes.

“This report provides important context for New Hampshire policymakers as they endeavor to build the next state budget,” said Jeff McLynch, executive director of the New Hampshire Fiscal Policy Institute (NHFPI). “Our tax system asks much more of those individuals who are least able to pay, making it even harder for them as they struggle to get ahead. Policymakers should explore reforms that will make the tax system more fair to hard working Granite Staters.”

 Who Pays? examines how state and local tax systems affect non-elderly individuals and families at all income levels and finds that New Hampshire’s low- and middle-income residents pay a significantly higher percentage of their income in taxes than those in the top one percent. NHFPI has published an updated fact sheet to provide context for the Granite State. Key findings for 2012 include:

  • Individuals and families that comprised the poorest fifth of taxpayers in New Hampshire, on average, paid 8.3 percent of their incomes in state and local taxes.
  • Individuals and families in the middle of the income distribution, those with incomes between $44,000 and $70,000, paid 6.6 percent in taxes.
  • The top 1 percent of income earners experienced an average effective tax rate of 2.6 percent, with an average income of slightly more than $1.3 million.

New Hampshire’s tax structure will be the focus of a panel discussion at NHFPI’s upcoming conference, Building a Better Budget: Meeting Today’s Needs, Preparing for Tomorrow. Participating panelists include Carl Davis, senior policy analyst for ITEP. Building a Better Budget will be held on Friday, January 23, 2015 from 8:30 a.m. to 2:00 p.m. at the Grappone Conference Center in Concord, NH. The event registration fee is $45. Pre-registration is required via the NHFPI website; online registration is available through January 14. Complete details and links to register may be found at  www.nhfpi.org/nhfpi-policy-conference.

The New Hampshire Fiscal Policy Institute is an independent, non-profit, non-partisan organization dedicated to exploring, developing, and promoting public policies that foster economic opportunity and prosperity for all New Hampshire residents, with an emphasis on low- and moderate-income families and individuals. Learn more at www.nhfpi.org.

Andy and Laurie Sanborn Failed to Pay Their Property Taxes At Least 25 Times in 20 Years

Sanborns have a steady history of failing to pay their taxes on time, with at least 25 tax liens against their private homes and businesses over the last 20 years 

Concord, NH – State Senator Andy Sanborn and State Representative Laurie Sanborn failed to pay their property taxes at least 25 times over the past twenty years, according to research by Granite State Progress. The Sanborns have had dozens of tax liens placed against their private homes and businesses over the past two decades.

“Andy and Laurie Sanborn failed to pay their property taxes at least 25 times over the past twenty years,” said Zandra Rice Hawkins, executive director of Granite State Progress. “Those numbers are from Merrimack and Cheshire County alone as we have yet to even look at other areas of the state where they lived and worked. The Sanborn’s record of business bankruptcy, district hopping to run for political office, close relationships with the Free State Project, and now at least 25 tax liens in twenty years calls into question whether they are fit to represent New Hampshire.”

Not only have the Sanborns been delinquent on their taxes numerous times, they have feigned ignorance on at least two occasions when media outlets pointed it out. In May 2012, when questioned about tax liens against the Concord Monitor, Andy Sanborn said: “Honestly, I don’t know how we missed them, but we missed them. . . . We made a mistake and we corrected it today.”  Laurie Sanborn used the same line in February 2012 about a tax lien on a parking lot she owns, telling the Concord Monitor that she was unaware of a tax lien they questioned her about: “’I don’t know anything about that. Obviously, I’ll be taking care of that right away.” [Concord Monitor, “Tax liens peppered across city Unpaid taxes for 2011: $1.67 million.” 5.29.12;]

A 26-page list documenting examples of when the Sanborns failed to pay their property taxes is here.

America’s Largest Pharmacy “Inverts” To Avoid Paying Their Fair Share

Walgreens (Image by Mike Mozart Flickr CC)

Walgreens (Image by Mike Mozart Flickr CC)

The right wing has cut billions out of the Supplemental Nutrition Assistance Program, claiming that our country can’t afford to feed hungry children.  But at the same time, some of our country’s biggest recipients of federal aid – corporations such as Walgreens – are taking advantage of tax loopholes to avoid paying their fair share in taxes.

For decades we have watched our jobs be shipped offshore in corporate restructuring. They take the jobs from hard working Americans and send them to China or India to boost their corporate profit margins. However there is a new trend in Corporate America that is sweeping across the nation. It is called “inversion.”

Inversion is where an American company buys a foreign company and the renounces their US citizenship to avoid paying US taxes. The best part is that it is all done on paper, so they do not even have to pack a box from their corporate headquarters.

Walgreens started over 100 years ago in the small town of Galesburg, Illinois and has grown into the nations largest pharmacy chain, with revenue in the billions. Walgreens, which is still based in Illinois, announced that they are considering renouncing their “corporate citizenship” to move to Switzerland, a tax haven for corporations.

By renouncing their citizenship, Walgreens will avoid paying $4 billion dollars in corporate taxes annually. This is treasonous when you consider that one-quarter, $72 billion dollars, of Walgreens annual revenue comes from taxpayers in the form of Medicare and Medicaid payments. Walgreens is happy to take the taxpayers’ money but do not feel they should have to pay their fair share.

“Much of Walgreen’s financial success was built on programs and infrastructure provided by the U.S. government and paid for by U.S. taxpayers,” said Senator Dick Durbin (D-IL) in a letter to the Walgreens CEO and Board of Directors. “If you and Walgreen’s board of directors decide to invert to avoid U.S. taxes, you will be turning your backs on the very people that have allowed Walgreens to thrive and prosper.”

“Inversion schemes are bad for shareholders and bad for America,” said LIUNA General President Terry O’Sullivan. “They erode tax money that should be used for support U.S. infrastructure, education, national defense and other crucial programs. They potentially tarnish the reputation – and thus the value – of companies. And they can make it more difficult for shareholders to hold a company, its officers or directors accountable.”

LIUNA used their pension fund to send a letter to the Walgreens board of directors to institute a policy barring inversions.

“We need to start demanding a little more patriotism from these so-called American corporations,” said Richard Trumka, President of the AFL-CIO. “If they want to keep benefiting from everything our great country has to offer, they need to start showing a little more loyalty to the people who live and work in America. And they need to stop threatening to desert the United States and stop paying their taxes altogether unless we give in to their demands.”

Inversions are not new, corporations have been offshoring their corporate citizenship to avoid paying taxes for many years. Thanks to these corporate tax loopholes, 26 profitable corporations including Verizon and GE, paid zero in income taxes from 2008-2012. The most egregious part of this is that some of these highly profitable corporations actually got rebates and refunds from the federal government making their effective tax rate -10%.

We need to close these corporate loopholes that are letting billions of dollars slip through our fingers. It is also sickening to hear how the corporate tax rate is too high, when many of these highly profitable corporations pay less percentage wise than the average American.

Why does this type of activity not outrage more small business owners? These main street shops do not have the ability to invert to avoid paying their taxes. When will Congress start working for the people on Main Street instead of the people on Wall Street?

“Key members of Congress have introduced legislation based on Obama’s plan. Sen. Carl Levin (D-MI), Chairman of a subcommittee that has investigated tax avoidance by Apple and other corporations, has introduced the Stop Corporate Inversions Act of 2014 (S. 2360). Rep. Sander Levin (D-MI) has introduced a companion bill in the House of Representatives (H.R. 4679) that would raise $19.5 billion over 10 years,” reported the Americans for Tax Fairness.

“The President, Senator Wyden, Senator Levin and Representative Levin have all proposed solutions to plug the loophole and the Senate Finance Committee is holding a hearing on the issue today. Let’s get it done,” concluded Trumka.

Are we as Americans going to accept this treasonous activity from our nations largest pharmacy chain? We must close these corporate loopholes that allow corporations to skip out on paying their fair share.

 

UPDATE 8-5-14
Walgreens backs down on plan to invert.  Read more here.

LIUNA Pension Fund Proposal Calls on Walgreen Co. to Bar Inversions

LIUNA - The Laborers' International Union of North America

LIUNA – The Laborers’ International Union of North America

“Bad for shareholders and bad for America” 

Washington, D.C. – A pension fund affiliated with LIUNA – the Laborers’ International Union of North America – today filed a shareholder proposal calling on the Walgreen Co. Board of Directors to institute a policy that bars inversions.

Companies which “invert” maintain the benefits of being based in the U.S., while slashing the amount of corporate taxes they pay.

The scheme – in which a U.S.-based corporation with operations outside the U.S. restructures so the U.S. parent operation is replaced by a foreign corporation – is estimated to cost the U.S. economy $20 billion in the next 10 years, according the White House. Walgreen’s consideration of the scheme has drawn criticism from President Obama and proposals in Congress to curtail it.

 The shareholder proposal was filed by the Massachusetts Laborers’ Pension Fund. LIUNA-affiliated funds have been active since 2005 in overseas incorporation issues involving U.S. companies.

 “Inversion schemes are bad for shareholders and bad for America,” said LIUNA General President Terry O’Sullivan. “They erode tax money that should be used for support U.S. infrastructure, education, national defense and other crucial programs. They potentially tarnish the reputation – and thus the value – of companies. And they can make it more difficult for shareholders to hold a company, its officers or directors accountable.”

 In addition, reincorporation outside the U.S. carries the risk of removal from the S&P 500 and other stock indices which can affect a company’s stock price.

 The proposal is the first of its kind in the retail industry.

Ayotte, Brown, Guinta, Garcia Call for Massive 74% Health Care Tax Hike on Granite State Working Families

GOP Politicians Vow to Push a Massive 74% Tax Hike for Tens of Thousands of Granite Staters Already Using Affordable Care Act Tax Credit

Concord, NH – In light of one of yesterday’s court rulings, U.S. Senator Kelly Ayotte, U.S. Senate candidate Scott Brown, and Congressional candidates Frank Guinta (CD1) and Marilinda Garcia (CD2) vowed to push for a massive 74% health care tax hike on the 31,000 Granite Staters already using Affordable Care Act tax credits. Up to 48,000 Granite Staters overall are eligible for the subsidy.

“Senator Ayotte, Scott Brown, Frank Guinta, and Marilinda Garcia want to repeal the health care tax credit for working families and raise health care premium costs by a whopping 74 percent,” said Zandra Rice Hawkins, executive director of Granite State Progress. “If these politicians had their way, more than 30,000 Granite Staters would see their premiums rise by an average of $3,480 annually. That’s even before addressing the fact that these same politicians would take away free preventative care check-ups and young adult coverage up to age 26 as part of their extreme ideological opposition to health care reform.”

The ruling trumpeted by Ayotte, Brown, Guinta, and Garcia – all Republicans – would raise costs on average $3,480 for Granite Staters who use the Affordable Care Act subsidy to afford quality health care coverage. Already, 31,000 Granite Staters use the health care tax credit; overall 48,000 are eligible to do so.

“This wouldn’t even be an issue if New Hampshire Republicans hadn’t blocked a state-based exchange out of political spite. New Hampshire would have been able to craft its own exchange, manage the enrollment process, and conduct public education to inform residents about their health care options. We wouldn’t be facing any concerns over the tax credit now,” Rice Hawkins said.

Conservatives are celebrating a federal district court ruling in Washington, D.C. yesterday that would take away health care tax credits from families and small businesses that live in states where conservative Republicans blocked a state-based exchange. It is questionable whether the district court ruling will be upheld though; the ruling was made by a majority conservative 3-judge panel and may be overturned by the full DC Circuit en banc panel, especially in light of a separate, unanimous ruling yesterday by the 4th Circuit Court of Appeals that upholds the subsidies. The Obama Administration has indicated tax credits will continue until a final determination is made.

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Sources:

Kaiser Family Foundation. A State-by-State Look at How the Uninsured Fare Under ACA. Accessed 7.22.14 http://kff.org/interactive/uninsured-gap/

Department of Health and Human Services, ASPE Research Brief: Profile of Affordable Care Act Coverage Expansion Enrollment for Medicaid/CHIP and the Health Insurance Marketplace, 10-2-2013 to 3-31-2014. April 2014. http://aspe.hhs.gov/health/reports/2014/MarketPlaceEnrollment/Apr2014/pdf/nh.pdf

Department of Health and Human Services, ASPE Research Brief: Premium Affordability, Competition, and Choice in the Health Insurance Marketplace, 2014. June 2014. http://aspe.hhs.gov/health/reports/2014/Premiums/2014MktPlacePremBrf.pdf

 

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