For Immediate Release
Tuesday, July 23, 2002
Statement by AFSCME President Gerald W. McEntee on "Show Me the Money" Report
The American Federation of State, County and Municipal Employees (AFSCME) welcomes this new focus by the American Legislative Exchange Council (ALEC) and Manhattan Institute for Policy Research on the worsening state fiscal crises — a major challenge that we have been discussing and lobbying on for the better part of a year. Unfortunately, the entire "Show Me the Money" report relies on worn-out clichés attacking public service employees and the vital work they do rather than offering constructive solutions to the very real problems faced by states and municipalities. In fact, the report fails to identify one of the most important causes of the cumulative $50-plus billion budget shortfall — plummeting corporate tax revenues.
According to the Multistate Tax Commission, state taxes on national companies fell to only 5.2 percent of company profits in 2000 from almost 10 percent two decades earlier. Moreover, an IRS study released last week found that untaxed corporate profit increased to 24 percent of profits reported to shareholders in 1998 up from 14 percent in 1996 — a loss of $66.5 billion for the states in just two years.
How are big corporations getting away with avoiding taxes? Some are setting up offshore "Bermuda triangle" shelters to hide income. But even more large companies are relying on tricks such as abusive tax shelters and shifting income earned in one state to other states that tax them less, according to recent New York Times articles.
State expenditures are rising because the country has greater and more pressing challenges to overcome. First and foremost among them are homeland security needs. But America's working families also believe that strengthening public schools, providing health care for needy seniors and children, building and repairing roads and bridges, and other critical areas are important priorities as well.
AFSCME and the bipartisan National Governors' Association have been calling on the Bush administration and Congress to provide increased federal aid to the states to deal with skyrocketing costs in the areas of Medicaid, prescription drugs, and public safety. But instead of joining us in this effort, some members of Congress are allying with well-funded corporate lobbyists to push for more business activity tax loopholes.
Especially in this era of corporate greed run amok, common sense and basic fairness demand that instead of forcing working families and the neediest among us to bear most of the spending cuts and revenue burden, profitable corporations should pay their fair share for the services they receive from states and localities. Indeed, it is time for America's working families to tell corporate CEOs, "Show Me the Money."
