Recently, Verizon’s Public Policy blog released a statement in which they highlighted the absurdity of Chicago officials trying to push a 10% tax for streaming movies online, meanwhile DVD purchases see no such tax. I agree with Verizon on this specific issue.
What I take issue with is the way that Verizon goes on to talk about how taxes in the telecom industry are limiting lower income citizens to access from the best that the telecoms have to offer.
Every time innovation creates a new business model, some policymakers see new opportunities to raise revenue, but Ievying taxes on something as essential as the Internet especially may limit the ability of those citizens who are stretched financially and need access the most. – Verizon Public Policy Blog
Verizon goes on to note that in 1998, Congress passed laws which banned taxing access to the internet. According to Verizon, Congress did this because they didn’t want “states and local taxing jurisdictions (to) weigh down broadband or the mobile Internet with so many taxes and fees” that the price of service was forced to increase.
But Verizon wants everyone to know that there is a way for lower income people to have access to all of Verizon’s services…..lower their taxes. Except, Verizon already pays little to no federal or state taxes. Verizon was one 26 American corporations who paid no federal income tax from 2008 to 2012, according to a report by the Citizens for Tax Justice. Fast forward to last year….has anything changed?
A surprising number of companies in the Standard & Poor’s 500, 57, have found ways to pay effective tax rates of zero, according to a USA TODAY analysis of data from S&P Capital IQ…Corporate giants such as telecom firm Verizon, drugmaker Bristol-Myers Squibb and power management firm Eaton, all reported effective tax rates of 0% during the past 12 months. – USAToday
In fact, as one site pointed out, Verizon is paying their CEO more than they pay in federal corporate income taxes. But these tax breaks help create jobs! Except, they don’t by any measure whatsoever.
So let’s move onto state tax breaks. Verizon claims that their low tax rates are what allows lower income people to have access to their services. Except, this is not even close to reality. In fact, it is the exact opposite. In the early 1990’s, Bell Atlantic (now Verizon) promised many states that if they received billions from state and local governments, they would wire their states with top-of-the-line technology.
By 2000, according to the Bell companies’ annual reports, press releases and state filings, about 50 million households should have been rewired. Over 9,787,400 households in 43 cities were supposed to be upgraded between 1995 and 1997. – Bruce Kushnick, “$200 Billion Broadband,” Teletruth Executive Director, New Networks Institute.
So, those taxpayers gave up billions and most got nothing from it.
In Pennsylvania, taxpayers have given Verizon nearly $2.1 billion for services that never came to fruition. In 1994, Verizon (then Bell Atlantic) agreed to have 20% of the state broadband wired by 1998, and 50% by 2004. Note that we are talking about 45MB/s symmetrical fiber service right to the door. So, how did Verizon do? Not well. In fact, by 2002, the state of Pennsylvania acknowledged that Verizon (again, then Bell Atlantic) would not come close to reaching the agreement and asked Verizon to update their plans as to how they would accomplish the agreement going forward.
That update, which needed to show Verizon was working toward that 45Mbps goal, never really came. Instead, in a ruling this week, the state essentially allowed Verizon to completely ignore the agreement, keep all financial incentives, and provide state-wide connectivity via copper lines, ignoring the language of the original agreement. – DSLReports
In New Jersey, taxpayers gave Verizon almost $13 billion in surcharges in return for having the entire state by 2010, a plan called “Opportunity New Jersey.” Again, Verizon didn’t even come remotely close to finishing off the agreement. When asked why Verizon never even wired many cities in the state, Verizon claimed that their more expensive, data-capped wireless service was more than enough to fulfill the 45 Mbps broadband agreement.
When some state government politicians in New Jersey called out Verizon, Verizon defended themselves by sending bogus public support letters to the state Board of Public Utilities, in the hopes that the state would let Verizon off the hook with the agreement. Verizon was let off the hook.