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Verizon One of Most Aggressive US Corporate Tax Dodgers, Says US Consumer Advocate

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Verizon’s possible entrance into the Canadian wireless market has triggered mixed reaction from all parties: the Big Three have launched an aggressive media campaign against the red US carrier and challenged Ottawa regarding its wireless policy. Canadian consumer advocates salute the rumour, and back Ottawa’s position.

But this isn’t the case with renowned US consumer advocate Ralph Nader, who has written a public letter to Prime Minister Stephen Harper calling the possibility of Verizon entering the Canadian market a “bad idea,” because the carrier is one of the most aggressive corporate tax dodgers in the US (via The Star).

In his letter, he points to a report by the highly regarded Center for Tax Justice and Good Jobs First entitled, “Unpaid Bills: How Verizon Shortchanges Government Through Tax Dodging and Subsidies”.

The report found that Verizon enjoyed some $14 billion in federal and state corporate income tax subsidies in the 2008-2010 period, even though it earned $33.4 billion in pre-tax U.S. income during that time.

At the federal level, Verizon should have paid about $11.4 billion at the statutory rate of 35 per cent during the three-year period.

Instead, it actually got $951 million in rebates, putting its federal tax subsidies at $12.3 billion.

Its effective federal tax rate was 2.9 per cent.

The report found that at the state level, Verizon should have paid about $2.3 billion in corporate income taxes during the period but it paid only $866 million.

He goes on to point to Verizon’s practices with which, he says, the carrier ripped off the US government: two years ago, the carrier paid $93.5 million to settle whistleblower charges that it had billed the government for tax-like surcharges it wasn’t entitled to impose.

From this perspective, Verizon doesn’t look good at all. He closes the letter by asking PM Harper if he would allow a wireless player with such a track record of ripping off the US government into Canada?

Would you?

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  • Al

    So… they “work the system” – just like any other corporation… and just like we all do when we try and apply every applicable tax break we can think of. If there were any actual proof of legal wrong doing, the government would get involved and not permit it. This is the fault of the US tax system.

    They are a corporation, like all the rest. People need to keep in mind that they will act as such, should they enter Canada.

  • sukisszoze

    How can the gov’t complains when it sets the rules in the first place???…I assume Verizon follows all the rules to get these subsidies and rebates. I would rather see a profitable company paying taxes than a company in bankruptcy owing a bunch of unpaid taxes.

  • Stefan Vasiljevic

    I agree. Everyone is doing it. And it is not a crime!

  • FragilityG4

    How much did Robellus pay Nader??

  • ????Dennis

    Finally Al, something we agree on. I was for sure thinking you would be all over this article to promote you dislike for Verizon. Glad it’s not all Robellus with you.

  • PRSHAN

    Bell and Rogers and Telus and every other Cdn carrier has benefited from “government tax handouts”.

    Nader needs to do some research first before trying to lecture us on how depraved a cell company is.

    Should we look at the current Canadian telecom oligopoly and see how many of them are currently utilizing tax loop holes to evade tax? Or even further, what prompted Nader to make this statement, what benefit did he receive from whom. THE BIG 3

    Competition drives efficiency and price reduction. The only people who won’t benefit from having Verizon in Canada are Rogers, Bell and Telus

    Nader criticizes Verizon for taking advantage of tax-subsidy programs that the government has MADE AVAILABLE TO IT. They would be stupid NOT to do it. What part of this is bad for the consumer?

  • ????Dennis

    My thoughts exactly, Fragility….. Robellus is grasping at anything they can. Loss of jobs, privacy issues, network disruption…. Anything they can think of. Just gotta hope Robellus and their team of lobbyists don’t win.

  • Al

    Like I’ve said before, I’m just trying to be objective. People think the grass on the other side (Verizon) is greener. No one knows for sure how green it will be. I’m just hoping it has less weeds.

  • iv

    They don’t take into account the payroll taxes, health insurance benefits among other things. And how many employees do they employ which contributes to the economy? Really wish people would get off the bash Verizon!

  • Kronk86

    “The only people who won’t benefit from having Verizon in Canada are Rogers, Bell and Telus”…and possibly the tens of thousands of Canadian employees of Rogers, Bell and TELUS…and almost everyone with a pension.

  • Manuel

    ….. And your point is?… Do you have a similar report on Rogers or any other Canadian Telecom? One recent experience to keep in mind is around TARGET, who is getting bad reviews from Canadian consumers because everybody was expecting to see US pricing at their stores here in Canada and it wasn’t the case. The same may happen with Verizon when they come. They are not coming in to give it away, but rather to compete in the local market. I would not expect miracles for the first little while but eventually I believe it will get interesting and more competitive, resulting in benefits for the consumer.

  • FragilityG4

    Assuming Robellus dosent compete and allow a mass exodus of customers … Who’s fault would that be? Verizon? Or themselves? Stop drinking their Cool Aid.

  • K3

    ” Do you think Verizon are saints in the US market? What makes them any better? They charge the highest rates, have the most customers and, thereby, are doing the same to Americans as the big 3 do to us! The ONLY shot they have at making it in Canada is to offer something extra of notable value. ”

    Objective?More trying to win others favor.

  • Al

    You took that out of context as it was addressed to someone “blindly” eager to jump on the Verizon bandwagon as if they were the holy saviours to come to Canada. And the recent report by Moody’s Investment Service (which IPIC recently referenced) echoes that last sentence.

    Quit being a troll K3.

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