As part of a so-called “inversion” to lower its tax rate, Mylan moved its corporate headquarters from Pennsylvania to the Netherlands. According to filings by the Securities and Exchange Commission (SEC), the firm at the same time paid its top executives lavishly to offset their tax hit. The result was Mylan accelerating $32.5 million in executive compensation for its leadership team — and then reimbursing them for $20.5 million in taxes.
for press reporting on Mylan’s tax avoidance scheme.
The uproar over Mylan accompanies fresh outrage after European Commission (EC) regulators in August told tech giant Apple that it owes Ireland $14.5 billion in back taxes, plus interest. That’s American taxpayers’ money that should have stayed in our country to support health, education, early care, transportation, public safety, and other vital services.
“Our system has enabled much of the tax-dodging antics in which Apple and hundreds of other corporations have engaged,” analysts with Citizens for Tax Justice (CTJ) said in response. The non-profit watchdog group added that the federal treasury department should take a page from Europe and “crack down on rampant corporate tax avoidance.”
for more on CTJ’s advocacy to claw-back corporate taxes.
This type of unfair and immoral conduct by profitable corporations isn’t limited to the federal tax code. Large companies headquartered here have for years taken advantage of loopholes to avoid their fair share of state taxes, draining resources needed to sustain Connecticut’s quality of life.
“Our members have long called for an end to schemes that allowed big corporations to exploit small businesses and taxpayers,” said AFT President Jan Hochadel. “That’s why we supported legislation to require ‘combined reporting’ for large, multi-state companies. It’s the kind of common-sense reform that not only prevents tax dodging, but also levels the playing field for local, small employers,” she added.
Hochadel’s comments refer to a law passed in 2015 following years of advocacy by consumer, labor, and open government groups to end a practice similar to “offshoring” of corporate profits. The tax-avoidance scheme was costing state taxpayers at least $130 million annually.
to learn more about the combined reporting law from Connecticut Voices for Children.
The state’s largest business lobby — the Connecticut Business and Industry Association (CBIA) — for years spent significant sums in an attempt to block passage of the legislation. These special interests didn’t stop after combined reporting became law; they joined with large corporations like General Electric (GE) to persuade lawmakers to delay its implantation.
Now the CBIA is pouring over $400,000.00 into a campaign to elect legislative candidates opposed to tax fairness for middle class and working families. If they win, the result will be even more of the same austerity policies that have already wreaked havoc on our state’s quality of life.
for commentary on the CBIA’s attempt to influence the outcome of legislative elections.
That’s why AFT Connecticut is mobilizing volunteers for the Connecticut AFL-CIO’s efforts to “Get Out the Vote” for endorsed candidates. Phone banks and labor “walks” are scheduled in communities across the state so union members can talk to each other about the important choices we all face on November 8.
for the latest list of scheduled “Labor 2016” activities.