On Wednesday, members of For The Many NJ and other supporting groups sent an open letter to members of the Senate and Assembly Budget Committees urging them to amend a proposal (S3737/A5323) that would open major loopholes in the corporate tax code and make it easier for multinational corporations to hide their profits in tax havens overseas.
The letter was signed by labor unions, small businesses, essential workers, faith leaders, and advocates for immigrants’ rights, the environment, affordable housing, and racial justice.
“Corporations doing business in New Jersey should pay their fair share of what they owe to the state to support our communities, schools, infrastructure, and social safety net. Yet corporations are poised to get more opportunities to avoid paying their taxes with this bill, on top of an anticipated $1 billion tax cut at the end of the year,” the letter states.
The letter highlighted two key provisions of the bill that must be removed to avoid opening tax loopholes for multinational corporations to exploit:
- Reopening a loophole for phantom interest and royalty payments, allowing corporations to artificially reduce their profits for tax purposes
- Reducing the tax rate on foreign income in low-tax nations to merely 5 percent, rather than the 50 percent under current law.
The recommendations in the letter mirror those outlined in an analysis of the bill by New Jersey Policy Perspective (NJPP).
“New Jersey loses roughly $700 million to corporations shifting their profits to foreign low-tax jurisdictions,” the letter continues. “Eroding the corporate tax base to assist the world’s largest corporations in tax avoidance schemes hurts the state and its residents, while handing ever more money to corporate shareholders already experiencing record profits.”
The letter was signed by 27 organizations and labor unions, including: New Jersey Policy Perspective, Make the Road New Jersey, New Jersey Institute for Social Justice, ACLU of New Jersey, Latino Action Network, CWA, New Jersey Education Association, 32BJ SEIU, New Jersey Sustainable Business Council, Main Street Alliance, New Jersey Alliance for Immigrant Justice, and New Jersey Working Families Party.
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For The Many is a statewide coalition of more than 30 organizations working to expand funding for essential services and improve budget practices to meet current and future needs, especially for communities that have been historically left behind.