A Taxing Question

Blog by Justice Promoter Sister Judy Morris, OP

Recently, the following headline caught my attention: “Mackenzie Scott donates $2.7 billion to charity.”  The result of her generosity meant the 286 organizations supported could breathe a little easier and provide scholarships, increase community organizing and advocacy or engage in research.  Organizations serving African Americans, Native Americans, Hispanic Americans and Asian Americans benefitted greatly.  Mackenzie Scott also provided $4 billion for COVID 19 relief in 2020.

Donors like Mackenzie Scott deserve all the applause they receive.  One of the privileges I have in working with Water With Blessings is to thank donors for their generous gifts—gifts that save lives.

While I celebrate the generosity of donors like Mackenzie, I have great concern regarding corporations that pack away billions of dollars by not paying federal taxes.  Amazon is one of those companies, and they join 54 others that escape paying federal taxes. 

According to the Institute on Taxation and Economic Policy, at least 55 companies in the United States paid no federal corporate income taxes, despite enjoying substantial pretax profit. These tax-shirking companies represent various industries and collectively made almost $40.5 billion on U.S. pretax income in 2020.  The 55 companies would have paid a collective total of $8.5 billion for the year had they paid that rate on their 2020 income.  Instead, they received $3.5 billion in tax rebates.  From FED EX to NIKE to AMAZON, corporations have found ways to avoid paying federal income taxes.

In 2017, the Trump administration tax bill greatly benefitted millionaires and billionaires, but not middle-class workers.  In 2021, Republican Senators are refusing to fund the IRS tax enforcement staff, even though the agency has lost 20% of its staff through budget cuts. These enforcement officials would the people that help prevent people and companies from cheating the tax code, and it was expected that they would help add more than $100 billion to federal coffers.

People like Scott or organizations like Nike Purpose or Fed Ex Cares can easily afford to donate billions to nonprofit organizations because they have benefitted from the 2017 tax bill and years of tax loopholes.

The need for a level playing field for paying taxes is clear. The working poor and middle class continue to struggle to pay the bills and have money to set aside for retirement.

The United States continues to struggle with large numbers of homeless people, skyrocketing childcare costs, affordable health care and deteriorating infrastructure.  Federal taxes paid by large corporations could have provided much needed relief in all these areas.

There is a reason “the poor are always with us.”  Powerful decision-makers can change the script with financial decisions that respect the basic rights and dignity of all its citizens.

 

Posted in Peace & Justice Blog

8 responses to “A Taxing Question

  1. Congress has made the Federal Income Tax program a mess filled with all sorts of loopholes designed by Congress to aid various special interest group. The only way in my opinion to fix our tax code is to eliminate the income tax once and for all and replace it with The Fair Tax proposal. However, only very few of our Representatives in Congress would agree to consider it. Just think how many tax accountants and lawyers would have to change their practices. But also think how nice it would be to be able to keep your entire paycheck without any taxes of any kind being taken from it.

  2. What exact items in the tax code do you believe are unethical? I never seen anything mentioned in my ethics classes that pointed out availing ourselves of legal means is unethical. But I would like to know your opinion here.

  3. Thank you, Judy. Very informative and maddening. Where would I find a list of those corporations?

  4. It’s the old trickle down theory which is disproved tie after time. What is maddening is that Bezo of Amazon and some of his billionaire colleagues use their tax breaks for expensive distractions as space travel. Meanwhile the public is faced with inadequate incomes, shortages, climate disasters, technology robbery, etc.

  5. Very interesting an insightful blog Sr Judy. And it would seem that the “charitable gifts” of the deep pocket companies who don’t pay proper taxes would be similar to those Jesus refers to when he says that the poor widow’s mite was more than the gifts of the wealthy … food for thought, thanks.

  6. However what can change with present elected officials in power? … we have to continue to “fight” for power to vote.

  7. Thank you, Sister Judy, for stating what we all know, but might be afraid to voice. The gap between the rich and the poor, seems to grow increasingly worse, with the diminishment of the middle class. I find this so troubling, but I feel so helpless to make it tangibly better. I can only pray and trust that God is sovereign.

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