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Corporate Taxes Findings from research conducted on behalf of Americans for Tax Fairness by Lake Research Partners and Hart Research June 22, 2013. Celinda Lake Washington, DC | Berkeley, CA | New York, NY LakeResearch.com 202.776.9066. Executive Summary.
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Corporate Taxes Findings from research conducted on behalf of Americans for Tax Fairness by Lake Research Partners and Hart Research June 22, 2013 Celinda Lake Washington, DC | Berkeley, CA | New York, NY LakeResearch.com 202.776.9066
Executive Summary • Voters support closing corporate tax loopholes and believe large corporations need to be paying their fair share. • Support for reform is stronger when voters hear about corporations who have paid no taxes at all or have moved profits overseas to avoid paying taxes. • Connecting corporate tax loopholes to the same corporations that have shipped jobs overseas is an important connection to make for voters. The idea of subsidizing the same companies who are laying off American workers doesn’t sit well with voters. • Voters are overwhelmingly supportive of progressive corporate tax reforms like ensuring that American companies are taxed on overseas profits. • Even when voters hear arguments on both sides, they support the progressive argument by a 21-point margin. 2
More than half of voters say ensuring big corporations pay their fair share of taxes and closing tax loopholes for big corporations is a very important goal (rated 9 or 10 on 10-point scale). This should be a very important goal* for the new budget bill: Ensure big corporations pay fair share of taxes Close tax loopholes that benefit big corporations Ensure rich pay their fair share of taxes Reduce tax rates on all taxpayers Reduce tax rateson corporations * 9-10 ratings on zero-to-ten scale, 10 = extremely important goal Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
Having big corporations pay their fair share and closing their loopholes would help fund voters’ top budget priorities, like protecting education, Social Security, and Medicare from cuts. This should be a very important goal* for the new budget bill: Protect K-12 education from cuts Reduce federal budget deficit Protect Social Security and Medicare from cuts Reduce federal government spending Increase public invest-ment to create jobs Protect Medicaidfrom cuts Reform entitlement programs * 9-10 ratings on zero-to-ten scale, 10 = extremely important goal Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
Strongly approve Somewhat approve Voters support a range of progressive corporate tax reforms. Increase tax on U.S. corp-orations’ overseas profits to ensure it is as much as tax on their U.S. profits Ensure all corporations pay at least 25% on profits earned overseas Close loopholes allowing corporations/wealthy to avoid U.S. taxes by shifting income overseas Prevent corporations from avoiding taxes when they award execs millions in stock options Establish small tax on all stock/bond/market trades (e.g., $3 on every $10K) Eliminate tax breaksfor oil companies 83% 77% 73% 63% 62% 59% Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
Not sure Tax rates on corporations should be lower Tax rates on corporations should be higher Higher67%42%29% 50%44%47% Lower6%19%27% 16%18%18% 75% HIGHER/SAME DemocratsIndependentsRepublicans Obama statesRomney states2014 Sen. targets Tax rates on corporations should be kept at the current level Nearly half (48%) of voters say tax rates on corporations should be increased, compared to 16% who say tax rates should be lower. Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
In focus groups, we found that voters have very little knowledge of corporate taxes in general and have mixed views about whether corporate taxes should be higher or lower, but they see big corporations as gaming the tax system for their own benefit. Some are nervous about the effect of raising corporate taxes on jobs. • “I don’t know, I don’t know enough about corporate taxes.” (White College Woman, Richmond) • “However, when you get to some of these large corporations, just because they’re standing in money doesn’t mean they’re creating jobs.” (White College Woman, Richmond) • “Right. If we gave them the same incentive they’re getting in some of these countries they’re taking it to, and told them that we’re going to tax you really bad if you keep it over there, they’d bring those jobs back and that would…” (White College Woman, Richmond) • “Quit bailing out the big corporations” (Latina, Denver) • “That is really confusing to me because corporations can take money and shelter it by investing it. That’s where that to me the net worth comes into play is that if the money is invested and it’s producing, that’s a good thing so I don’t know how you tax it.” (Latino, Denver) • “Lower the taxes to help out the corporations. Yeah, if we raise the taxes it’s just gonna drive more of our corporations overseas” (Debate Group, St. Louis) 7 Americans for Tax Fairness focus groups with swing voters. Conducted Spring 2012 by Lake Research Partners
Voters overwhelmingly believe that new revenue from closing corporate loopholes should be used to reduce the budget deficit and make public investments, not to reduce corporate tax rates. For which one of these should tax revenue from closing corporate loopholes and limiting deductions be used? All voters Reduce deficit/ make public investments 84% 87% 79% 85% 80% 85% Reduce rates on corporations 11% 10% 13% 10% 13% 8% Reduce the budget deficit and make public investments Democrats Independents Republicans Obama states Romney states 2014 Senate target states Reduce tax rates oncorporations Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
More than two-thirds of voters (68%) find a message that argues for ending tax breaks for large corporations that ship jobs overseas to be convincing. Very/fairly convincing reason for raising new tax revenue in the next budget by limiting deductions for wealthy and closing corporate tax loopholes: 68% 67% 63% 62% We should end tax breaks to large corporations that ship jobs overseas and use that money to invest in jobs in America improving our roads and bridges, rebuilding manufacturing and making us energy independent. We should ask millionaires to pay at least as high a tax rate as their secretaries, instead of cutting education funding for our children. The fiscal cliff bill left in place huge loopholes and special-interest tax breaks used by big corporations to avoid taxes. Profitable corporations--some of whom pay no taxes at all--should do their share to help reduce the deficit. It's better to end huge tax subsidies to oil companies making record profits than to make seniors pay more for Medicare. Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
In focus groups with swing voters, we found that the most visceral patriotic theme is voter opposition to corporations shipping American jobs overseas. • “Well I’ll tell you one thing I would like to see, I am all for American companies and the CEO and the bigwigs that want to live in our nice country, that’s fine, but if you’re a company, and I know you’re working for your shareholders, but if what you’re really doing, if you’re thinking of the country and the rest of the people in the country, if 90% of your workforce is offshore and you’re bringing in money for the company but you’re not doing anything for this country; I’d like to tax you about a 95% rate or you can move over to Manila where when you come out of your million dollar house they’re going to kidnap you and kill you.” (White Non-College Man, St. Louis) • “We need the business here, we need people to work here, so why would we send it off there, especially when it’s used as a tax loophole for a lot of companies anyway.” (White College Women, Richmond) • “And I said I think that we should offer incentives to companies to keep their business in the U.S. because in the end that’s adding more jobs here.” (White College Woman, Richmond) • “Eliminate tax breaks that go to the corporations and ship jobs overseas and provide incentives, I guess back from overseas, and provide incentives to come back to the USA…” (White College Woman, Richmond) 10 Americans for Tax Fairness focus groups with swing voters. Conducted Spring 2012 by Lake Research Partners
In head-to-head statements on corporate tax rates, our side beats the Republican argument by 21 points when we talk about big corporations rigging the system to avoid paying taxes. Concerning corporate tax rates, with which statement do you agree more? REPUBLICANS: “America has the highest income tax rates on businesses in the world. We need tax reform that broadens the base by eliminating loopholes, which will allow us to reduce corporate tax rates. This kind of pro-growth tax reform will make the system simpler, more fair, grow our economy, and raise more revenue." Agree strongly 23% 37% +21 Democrats DEMOCRATS: “Big corporations use their lobbyists and campaign contributions to rig the tax system in their favor. Profitable oil companies get billions in special tax breaks while large companies like General Electric and Verizon pay no federal income taxes some years. It's about time big corporations started living by the same rules as the rest of us." Agree strongly 44% 58% Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
Voters oppose corporations and the rich who dodge taxes using offshore accounts. However, while voters think it is unpatriotic to dodge paying your fair share of taxes, they don’t see it as patriotic to pay your taxes due to perceptions of waste and misappropriation in government spending. • “Stop making it profitable for large corporations to hide or shelter their money offshore overseas. No more tax breaks that benefit a few and not the majority.” (White College Woman, Richmond) • “They take it away from us here and move it so they can pay less.” (Latino, Denver) • “I don’t like it because of the fact that the rich dodge their money and put their money in off shores accounts. And I do like the fact that those who have succeeded should pay their fair share because you know, we want to, we want America’s money to stay in America.” (White Non-College Man, St. Louis) • “I don't, I feel that I, I don't mind paying taxes because it's one of the things that makes our country strong… but I want the value, I don't want it wasted and I want people that are even more able to pay than me to… contribute to making this country sound and safe.” (White Non-College Woman, Denver) • “I think it[goes] too far.” (White Non-College Woman, Denver) 12 Americans for Tax Fairness focus groups with swing voters. Conducted Spring 2012 by Lake Research Partners
Name names. Talking about specific companies that have avoided paying taxes or paid no taxes at all are top reasons voters support reforming the tax system. Talking more generally about corporations not contributing toward reducing the deficit is less effective. Which one or two of these are the best reasons to reform the tax system? Apple, Google, and Microsoft avoided billions in U.S. taxes over three years by using tax loopholes More than two dozen big corporations, incl. G.E., Verizon, & Boeing paid no federal income taxes in the last four years Companies that send American jobs overseas get tax breaks Profitable oil companies receive billions of dollars in tax breaks every year The corporate share of federal tax revenue has plummeted by 75% over the past 60 years Corporations have not contributed one dime to reduce the deficit in the recent budget bills Americans for Tax Fairness survey of 1,006 voters. Conducted January 18-22, 2013 by Hart Research Associates
The idea that some profitable large corporations pay no federal income taxes at all strikes swing voters as extremely unfair and makes them very angry. • “Well just from I've seen on news programs about like GE not paying taxes and things like that so” (White Non-College Woman, Denver) • “You have Exxon Mobil saying that they didn’t pay one penny in taxes last year…and yet they are declaring $14 billion a quarter in profits.” (White Senior, Richmond) • “I can’t remember if it was Westinghouse or General Electric, they didn’t pay, I think it was back in 2010 or 2011, they didn’t pay a dime in taxes …And then you have other corporations that are paying disproportionate amount of taxes which that can sometimes cause um, them to not be able to reinvest capital in their company.” (White Non-College Man, St. Louis) 14 Americans for Tax Fairness focus groups with swing voters. Conducted Spring 2012 by Lake Research Partners
Swing voters are concerned that raising taxes on large corporations will hurt employees and consumers as well as result in potential job losses or moving jobs overseas. “Closing loopholes” helps avoid this concern, as does telling them about profitable large corporations that pay no federal income taxes. • “So as an incentive, as a company, there is a person that owns the company. If I could, you know like if I had to pay you know 35% taxes here or I could get away with paying 12% taxes here, you know so the workforce isn’t as good, but you know.” (White Non-College Man, St. Louis) • “I think you have to be careful on just raising corporate taxes, like just raise them to raise money because you may lose your corporation. I mean we have to be competitive with corporate headquarters all around the world and you know with other manufacturing businesses so you have to be real, you can’t make it so unlevel with you know other countries …that you know the corporations are going to saying why do I even want to incorporate here, I can incorporate in the Bahamas, you know, so you have to be careful with that.” (White College Woman, Richmond) • “If you tax corporations way too much then they’re just going to take it out on you know not, creating enough jobs and you know layoffs and, and stuff like that, so” (Latino, Denver) • “I think it, I mean it’s kind of iffy because if you tax them more they’re going to increase their prices on their products.” (Latina, Denver) 15 Americans for Tax Fairness focus groups with swing voters. Conducted Spring 2012 by Lake Research Partners
Eliminate the tax loopholes and giveaways for large corporations Message Triangle—Corporate Taxes Patriotism: If you do well in America, you ought to do well by America. It’s time to end tax breaks for companies that ship American jobs overseas. Thirty corporations spent over $476 million on lobbying and $22 million on campaign contributions to Congress and dodged $10.6 billion in taxes. Fairness: Large corporations should pay their fair share It's time we overhauled our tax code so that it's fair to middle class families who work hard and play by the rules, not just the wealthy special interests who rewrite the rules for their own benefit. It’s wrong that many profitable large corporations use huge tax loopholes to pay no federal tax at all. It’s time to invest in America: Washington politicians should stop wasting tax dollars on tax loopholes for the wealthy special interests and the wrong priorities while shortchanging the investments we need in America for our future, like education, job training, research and development, protecting seniors, rebuilding the nation’s infrastructure like roads and bridges, and reducing the deficit. We should level the playing field for small businesses by using tax revenue from large corporations to create incentives for small businesses to create jobs here at home. 16 Americans for Tax Fairness focus groups with swing voters. Conducted Spring 2012 by Lake Research Partners
Washington, DC | Berkeley, CA | New York, NY LakeResearch.com 202.776.9066 Celinda Lake email@example.com