Corporate Tax Dodgers Relying on Taxpayer Funding to Train Foreign Replacements for American Workers

Washington, DC – The news that U.S. taxpayer money has been used to train overseas Filipino call center workers raises a series of troubling questions.

Though USAID has announced the suspension of its participation in this program, a larger issue remains unresolved – how many U.S. corporations are benefiting from taxpayer subsidies of the call center jobs they have shipped overseas?  Are these same companies taking advantage of corporate tax subsidies and tax avoidance schemes while also taking advantage of U.S. taxpayers’ dollars at overseas call centers?

Numerous U.S. corporations, including many involved in off-shoring call center operations, have been found to engage in creative tax dodging schemes, depriving U.S. communities of vital sources of revenue.  That these same companies are relying on U.S. taxpayer money to subsidize the off-shoring of American jobs is a particularly disturbing component of the revelations about the USAID participation in the Filipino training program.

According to Ron Collins, Chief of Staff for Communications Workers of America, “It’s bad enough that some of our largest corporations are soaking U.S. communities and taxpayers for generous financial incentives to locate in a community, only to leave local workers jobless when they eventually ship the call center jobs overseas.  But it’s incredible to realize that these corporations are relying on taxpayer money to train foreign replacement workers – and that they’re avoiding basic tax obligations through complicated avoidance schemes in the process.”

Verizon and T-Mobile USA are just two examples of corporations that are gaming the American taxpayer through multiple channels:

  • Verizon: with more than $100 billion in annual revenues and nearly $15 billion in operating profits, Verizon is a large and prosperous company that should pay a substantial amount in taxes to federal, state and local governments.  However, Verizon has found ways to get around its obligations and pay dramatically less than it should. At the federal level it uses tax avoidance techniques to bring its income tax rate down to a negative level — meaning that it receives rebate payments from the Treasury.  At the state and local levels, Verizon and its subsidiary Verizon Wireless have frequently received economic development subsidies and challenged the assessed value of their facilities in order to lower property tax payments.
  • T-Mobile USA: The company announced earlier this year that it was closing seven U.S. call centers, employing a total of 3,300 American workers.  In four of the seven communities where centers are slated to close, T-Mobile USA received millions in taxpayer dollars from state and local economic development subsidies. A  September 2011 report by Good Jobs First spotlighted tax breaks, grants, and subsidies totaling over $60 million, including; $3.9 million in Lenexa, KS; $1.3 million in Redmond, OR; $3.7 million from Frisco, TX; $5.3 million in Brownsville, TX.
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