Amazon’s continuous resistance to collecting sales taxes made it the first major American company to build its business based on tax avoidance. Contrary to popular belief, the company is still resisting today.
But they’re lies. You need to know why so you can spread the truth.
Lie #1: U.S. corporate tax rates are higher than the tax rates of other big economies. Wrong. After deductions and tax credits, the average corporate tax rate in the U.S. is lower. According to the Congressional Research Service, the United States has an effective corporate tax rate of 27.1 percent, compared to an average of 27.7 percent in the other large economies of the world.
Lie #2: U.S. corporations need lower taxes in order to make investments in new jobs. Wrong again. Corporations are sitting on almost $2 trillion of cash they don’t know what to do with. The 1,000 largest U.S. corporations alone are hoarding almost $1 trillion.
Why does California reward ultra-rich companies that move jobs out of the state?
We’ll tell you why. In 2009, during secret, behind-closed-doors budget negotiations, a handful of state legislators and Gov. Schwarzenegger snuck in a colossal but little-known corporate tax giveaway into the budget in the dead of night. This loophole, known as the “elective single sales factor,” gives corporations the option to reduce the taxes they pay to California by keeping jobs and investment in other states – giving companies a huge incentive to hire outside of California. The loophole has already cost the state tens of thousands of jobs, and the only ones who are benefitting from it are California’s richest corporations. In fact, 80 percent of the benefits from this loophole go to the 0.1 percent of California corporations with gross incomes over $1 billion.
It’s high time we end the practice of shelling out taxpayer money to ultra-profitable companies that kill California jobs.