As a coalition of organizations gathered today to call on Albany to close corporate tax loopholes, this article appeared in the Wall Street Journal, articulating exactly the problem created by these loopholes:
"The percentage of U.S. corporations organized as nontaxable businesses has grown from about 24% in 1986 to about 69% as of 2008, according to the latest-available Internal Revenue Service data."
These "nontaxable" businesses have federal tax bills at or close to zero due to exceptions in the tax code that allow them to pass profits onto investors tax-free. This has led corporate tax collections to fall far below previous years and continue to remain lower than anticipated in current years.
At the same time, New York and the rest of the nation are facing record homelessness, hunger, and poverty. Yet in response, our State and Federal governments have continued to allow these loopholes, while cutting funding for programs and solutions to meet these growing needs.
An array of advocates and groups called on Governor Cuomo and the legislature today to close these kinds of loopholes in New York. Doing so could raise $1 billion in revenues for this year's budget-- no small sum to the human service sector that will undoubtedly face another round of cuts this year.
Our Deputy Executive Director for Policy, Shelly Nortz, puts it this way:
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"In New York we have record homelessness - over 45,000 men, women and children spent last night in New York City shelters or sleeping rough on the streets - at a government cost of over $1 Billion per year. And yet there is no plan to address this crisis that brings over 110,000 different men, women and children (40,000 of them) into city shelters each year. The front line services provided by Coalition for the Homeless to prevent and resolve homelessness have suffered years worth of deep cuts - a million dollars per year in lost services and jobs just for our own organization. The Coalition supports efforts to close corporate tax loopholes to help avoid further cuts and secure the resources we need to rebuild these vital services and reverse course."