I will finish for now on tax policy. I tried to keep it local this time but what is happening in Baltimore may be the worst in the nation-----but it will be coming to your neck of the woods.
I testified before the Baltimore City committee this week in Annapolis on several issues telling them that my organization is preparing to go to court over such a high level of unconstitutional tax policy. It is so egregious as to be unbelievable. I am hoping my testimony stopped one bill but no doubt others will proceed.
House Bill 507-----Property Tax credit for Supermarkets in 'food deserts' needs to go but I am sure Baltimore pols will continue to push it. It is yet another corporate tax break for NOTHING. These pols intend to eliminate all corporate tax base and have in Baltimore and that is why the government coffers are empty and communities crumbling. These public policies are deliberate-----and these new public policies are as bad for the citizens of Baltimore as the old ones. The same pols from Baltimore are working as hard as they can for Johns Hopkins and corporate profit.
GET RID OF THESE MARYLAND CORPORATE POLS. WHETHER REPUBLICAN OR DEMOCRAT WE DO NOT WANT BIG CORPORATIONS CONTROLLING ALL OF OUR CITY AND STATE GOVERNMENT.
Food deserts exist in underserved communities because Baltimore City Hall and Maryland Assembly chose to defund these communities and allowed for these conditions to grow. All that need be done is a little public subsidy given to people in these communities to be small business food store owners who then hire local employees and need to please consumers to keep their business. So, they are going to provide the food needed for the prices that can be afforded. The public subsidy can require a connection to local farm produce and organic products.
As the article below states-----and as I testified to the Maryland Assembly-----the bill 507 is written in just the right way as to allow only chain grocery stores to come into these communities and we know what that means....Giant, Shop Rite, and maybe Safeway. I have written about the dangers of allowing yet another industry consolidate to national chain status and that is especially true of food sources. That is what this bill is about. It seeks to send yet another food chain into communities having no other choices and give tax subsidy to do it. People who fight for a Shop Rite in underserved communities are not fighting for food justice----Shop Rite has some of the poorest quality of food there is. As I stated in testimony------the Safeway close to my community surrounded by underserved communities is so understaffed and the workers are miserable.......with not enough staffing food theft grows and these chain stores simply raise prices on the food to cover theft losses. Consequently, the food at that Safeway costs as much as what I pay at Whole Foods (Whole Paycheck). So, low-income people are being soaked of their earnings just to frequent these chain grocery stores. I spoke with a young lady on the Light Rail from Baltimore going to Glen Burnie Giant to shop because all of the chain grocery stores were too expensive in Baltimore.
This is what HB 507 perpetuates. Think about a local politician Ulysses Currie who was found to be guilty of pay-to-play profiteering by pushing for Shop Right in his district. Of course nothing happened to him for criminal behavior----but the same politics with grocery stores exist in Baltimore. The only thing said by Baltimore pols was that a Shop Rite needed to be included in this 'food desert' tax credit. The usual characters came out-----the Baltimore Health Department always comes down for bad health policy and testified that this tax credit was good for 'food deserts'.
PLEASE DO NOT ALLOW THESE POLS TO CONTINUE BAD FOOD POLICY.
This is a great article on Food Justice. Notice it is the opposite of what Baltimore pols are doing. This is the Baltimore City committee putting the bad policies forward. If your pol or justice organization is pushing chain grocery stores in your community----they are not doing what is best for that community!
[FOOD JUSTICE]
End the Corporate Exploitation of ‘Food Deserts’
03 April 2013
End the Corporate Exploitation of ‘Food Deserts’
FOOD JUSTICE ACTIVIST TANYA FIELDS SAYS BIG CORPORATIONS 'INTENTIONALLY CREATE' FOOD DESERTS IN POOR COMMUNITIES FOR PROFIT
By Tanya Fields
Read more at EBONY
If you have been following the conversation around the lack of fresh foods available in certain districts across the country, then you have probably heard the label "food desert." More and more, this term is being used to justify the existence of large corporate grocery chains in poor communities. Food activist LaDonna Redmond explains:
“The use of the phrase ‘food desert’ creates a set of problems. The first problem is the term suggests that economic development is at the expense of community development.
[It’s] really nothing more than a marketing term. Food desert identifies for corporate America how to sell cheap, off brand food to our community. When we know that cheap, highly processed food is at the crux of the rise in chronic diet related diseases.
In the end, the term masks the real harm of the U.S. corporate controlled food system by suppressing the ability of community entrepreneurs to develop and finance scalable community solutions. The danger of accepting the food desert philosophy is that it masks the real problem of the corporate controlled food system: poverty and hunger.” I couldn't agree more.
This term has been thrown around by the USDA, anti-hunger advocates and large supermarkets themselves like Wal-Mart to explain their existence in communities facing food hardship and ultimately those same corporate chains receive subsidies that aren’t available to smaller, local entrepreneurs. The arrival of these retailers that are supposed to help the community many times help to set the stage for gentrification, as well as not paying a living wage job to residents, if the jobs are even available to them at all.
There is no doubt that many impoverished communities need access to healthy, quality, culturally relevant food. But it ought to be fresh food that will support our local farmers who are also suffering from a broken food system and nourish the bellies of our babies while simultaneously stimulating economic and community development. We need food to go back to being a tool for change and culture. We must get beyond “food deserts” and eventually beyond food justice and get to food sovereignty.
What does that mean? It means that we not solely rely on large corporations to “fix” our current food predicament, a predicament that they intentionally created. It means that we analyze and utilize our current community resources to create innovative and just solutions. Take for example Melissa Danielle’s Bed-Stuy Bounty that utilizes an online platform to buy food at wholesale and then split amongst buyers in a club. She delivers by bike or you can pick up from her home in Bed-stuy. Solutions like The People’s Grocery in Oakland, CA which includes a mobile market and several urban gardens and headed by Oakland native Nikki Henderson, they have set the model for mobile markets. Or consider Growing Power started by former professional athlete Will Allen that boasts several farms including one inside the city limits of Milwaukee and Chicago. There are projects like K. Rashid Nuri’s Truly Living Well which boasts a large urban farm a block away from the eternal resting place of Coretta and Martin Luther King, Jr., a farmer’s market and Community Supported Agriculture, as well as trainings, rentals and a summer camp. All of these projects are in “food deserts”; but instead of wooing large corporate food retail chains, they instead created the solutions themselves.
There is no doubt that many of the poor communities need access to healthy, quality, culturally relevant food. We must get beyond “food deserts” and eventually beyond food justice and get to food sovereignty.
Sustaining these initiatives isn’t easy. Ms. Redmond opened a grocery store in Chicago which ultimately closed. She shared that her experience taught her that the industry is dominated by large chains beholden to large food companies. Any alternatives remain difficult to gain capital for. Growing Power itself has received major criticism for accepting $1 million from Wal-mart. In New York City, there are few, if any subsidies given to small food retailers, but corporate grocer Fresh Direct is receiving $130 million in subsidies with no community benefits and only promises to try and create jobs while adding increased truck presence in an already overburdened community.
If communities understand that corporations rarely, if ever, have our best interest at heart, and if we educate ourselves on the economics of food while seeking out, creating and supporting the positive initiatives of organizations like the ones above, we have a fighting chance of reclaiming a piece of the food system and changing the face of our communities.
Tanya Fields is a food justice activist, public speaker, educator, food enthusiast, sometimes blogger, fierce mama bear of four precocious children and the founder and executive director of the BLK Projek. She is currently raising funds to start a mobile market in the South Bronx. In her spare time she updates a food blog called Mama’s Kitchen From Scratch and does a cooking demo workshop called Fab Food on a Food Stamp
Read more at EBONY http://www.ebony.com/wellness-empowerment/food-justice-end-the-corporate-exploitation-of-food-deserts#ixzz3T2MLOVkh
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HB 123 by Kurt Anderson is yet another surgical tax break aimed at favored communties with a specific socioeconomic target. Now, I live in a middle-class lower Charles Village----and I know Baltimore working class neighborhoods feel the same....our property taxes are so high because corporations are paying no taxes and all of this gerrymandered tax policy is making this worse. The citizens of Baltimore here the longest have been used as fodder for decades and we are going to court over Baltimore tax policy. As I said yesterday----the Maryland Constitution does not allow for egregious taxation and it requires taxation to be uniform.
Baltimore has plenty of people living in the city----it simply has public policy deliberately written to keep them impoverished and unable to contribute to the welfare of the city. This is not the fault of the residents----it is the fault of Baltimore Development and Johns Hopkins and their pols in Baltimore City Hall. They have sucked so much public money to themselves creating huge corporations =====taking over all of Baltimore's public sector to the detriment of the citizens of Baltimore====that people do not want to stay in this city. People do not want this kind of governing either long-term residents or new residents.
This bill is an example of this bad public policy and I know Kurt Anderson is simply bringing it forward because it was written by Johns Hopkins.
It is important to know that Baltimore's tax scheme is not being taken all over Maryland. Other counties would be aghast at the level of economic damage done with this subsidy favoritism that is completely unconstitutional.
Maggie McIntosh and Kurt Anderson as senior Maryland Assembly pols lead in these policies and they know they are unconstitutional and they do it simply to move wealth to a few. If you think a Harbor East filled with global corporations and criminal financial corporations is good development----you are third world in your thinking.
STOP ALLOWING THESE POLS TO STAY IN OFFICE. THEIR LEGACY IS HORRIBLE.
The key with these tax policies is that they are specific to Baltimore and within Baltimore the lack of uniformity is indeed harming individuals and communities. I encourage people to pursue this in court.
'Currently, to bring suit against the state, a taxpayer must have standing; they must show harm, caused from the state action, and different from the generalized harm suffered by other taxpayers'.
It's important to know as stated below-----economists overwhelmingly have shown no benefit derived from these tax credits and as I stated in the Maryland Assembly----Legislative Services have said the same for Enterprise Zone tax credits. THEY ARE NOT NEEDED. We want small and regional businesses as our state and city economic driver not global and national corporations.
Economic Development Are Targeted Incentives Constitutional?
By Michael D. LaFaive and Jeffery Weeden, published on July 6, 2004
Recently in Greenville, Michigan, Federal Mogul employees approved a new contract that contained more than $5 million in pay and benefit concessions in order to ensure that their plant remains in Michigan. Management at Federal Mogul had threatened to move to Mexico where it costs less to do business. The state offered additional incentives to help prevent Federal Mogul from moving. To date, the size of the incentive package has not been announced.
Economists have argued that such targeted incentives are unnecessary for economic growth and unfair to those who do not receive them. Some people are using the courts to try to thwart targeted incentive programs. Late last year the Mackinac Center described a case in Ohio that could change the way all 50 states try to lure business. An expanded version of the article appears below.
Should states be able to offer businesses tax breaks and other subsidies in order to lure them into locating a new plant within their boundaries? A case currently before the United States Sixth Circuit Court of Appeals will decide whether this practice — which favors some businesses at the expense of all the rest — is constitutional.
For decades now, policy-makers and state legislatures have been developing exotic schemes to lure businesses to their states, keep the ones they have, and “create” more jobs. Nationwide, these subsidies and tax breaks have reached an estimated annual value of nearly $50 billion.
The state of Michigan operates a number of such programs, including the Michigan Economic Growth Authority (MEGA), which has the power to grant tax credits to businesses. The Michigan Economic Development Corporation, the state’s quasi-public “jobs” agency, also gives out millions of dollars-worth of property tax abatements and oversees the state’s “renaissance zone” program, which provides tax relief to geographical areas of the state. This department has been the subject of state Senate hearings considering whether Michigan’s government should be in the business of trying to pick winners and losers in the marketplace.
But a far more important development is Cuno, et.al. v. Daimler Chrysler, in which the plaintiffs argue that such incentives violate the Commerce Clause of the U.S. Constitution. The case was filed by a number of parties, including two Michigan residents, and is aimed also at the state of Ohio and the city of Toledo.
The Cuno case is described as a “true test case” because it was brought largely to test the constitutionality of such programs. In March 2000, attorneys for the plaintiffs filed suit over a $300 million incentive package the state of Ohio offered to DaimlerChrysler in exchange for maintaining long-standing jeep production in Toledo, instead of opening a new plant in Michigan, just over the border.
The suit alleges that Ohio’s granting of property tax abatements and/or tax credits to DaimlerChrysler represents a violation of Commerce Clause restraints.
According to plaintiff counsel Peter Enrich, the Commerce Clause was designed to prohibit state regulation and tax policy from interfering with economic activity between the states. For example, one state may not raise barriers to competition with another state in order to protect its own interests.
But what about the power of a state being used to advance its own interests at the expense of another state? Does this not also constitute undue interference, on the part of that state, with interstate commerce? Enrich argues that the United States Supreme Court has “consistently struck down on Commerce Clause grounds, state tax breaks or benefits that discriminate against out-of-state economic activities or interstate enterprises.” In other words, when one state provides financial incentives to a business to build or expand a facility within its borders, and those incentives make the investment less costly than it would otherwise be if it were invested in another state, the incentive is unconstitutional.
On the other hand, in their brief before the court, defendant’s attorneys argue that the Commerce Clause “… does not require that all states maintain the same taxing system and rates.” In other words, incentives are just part of the states’ overall tax structures. Michigan may have a lower overall income tax burden, but the fact that a business locating in Michigan has lower taxes than one locating in Ohio doesn’t constitute discrimination against Ohio. Defendants argue that the Commerce Clause only prohibits states from erecting barriers to commerce. For instance, Ohio may not impose tariffs on Michigan-manufactured Cadillacs to protect Ohio-made Hondas.
At least one scholar thinks that judges may end up splitting the baby on tax incentives, declaring some actions unconstitutional but allowing others to remain. Robert D. Plattner, a correspondent for State Tax Notes, writes that “if the taxpayer’s liability in the ‘home’ state would be higher if it invests elsewhere than if it invests in-state, the incentive violates the requirement of tax neutrality and is unconstitutional.”
Plattner also argues that tax incentives that cause “spillover” tax relief are also unconstitutional. Spillover relief can occur when companies are given incentives to expand existing facilities rather than to build new ones. He argues that benefits from the tax relief may not be specific to the new part of the property (the expansion), but must abate the property tax on the older facility as well.
For example, in May of 2000, MEGA approved an incentive package valued at as much as $12.1 million for the Coca-Cola Company to expand its facility in Paw Paw. The company expanded an existing building and added a new one to house its wastewater treatment system. The tax credit portion of the deal was valued at over $5 million. But the company was also promised state and local abatements on its property, valued at $6.2 million.
According to Palmer, under this scenario, the tax credits would be unconstitutional if they made doing business in Michigan less expensive for Coca-Cola than it would be for the company to do the same business in a competing state. The property tax abatements would almost certainly be unconstitutional because the expansion won abatements for the entire property, not just for the new building and building expansion.
Establishing taxpayer standing to bring a lawsuit is a significant problem regarding challenging the Constitutionality of state tax incentives. Currently, to bring suit against the state, a taxpayer must have standing; they must show harm, caused from the state action, and different from the generalized harm suffered by other taxpayers. The requirement is designed to prevent abuse of the court system by limiting access to those with a specific and personal stake in the litigation. However, without taxpayer standing, citizens have almost no opportunity to challenge the Constitutionality of targeted tax incentives. In cases like Cuno, taxpayers lack standing because they can only show the kind of generalized harm suffered by fellow state taxpayers. With taxpayers shut out of court state tax incentives and their harmful side effects are insulated from judicial review.
One way to establish standing to challenge state tax incentives is to show a specific injury like the loss of income, job, or business, etc., caused by the state action. Also, Congress can grant standing through legislation. Targeted tax incentives can act as unconstitutional protectionism, harm the economic union of the states, and result in the kind of economic Balkanization that the Commerce Clause was intended to address. The Commerce Clause made unconstitutional the harmful “race to the bottom” effects of state protectionism that are analogous to the intent and effect of targeted state tax incentives. By establishing standing to bring suit either by showing either individual harm, or through a grant of Congress taxpayers could finally hold states accountable for targeted tax incentives.
As state lawmakers debate the merits of government-sponsored economic development in Michigan’s economic future, they would be wise to remember that the court may render many of their actions moot. The plain-English reason isn’t hard to fathom: because it’s fundamentally unfair for government to grant advantage to one business and not to others. And if the Constitution is found to condemn the practice, states may well follow suit.
# # #
Michael LaFaive is director of fiscal policy, and Jeffery Weeden is an adjunct scholar with the Mackinac Center for Public Policy, a nonprofit research and educational institute.
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Baltimore cannot do broad-based tax cuts because it has mortgaged so much of its corporate tax base already the city cannot function. This is why mostly selected global corporations are getting tax relief as small businesses suffer the high rates that the public does. So, now they are going with surgical cuts and all of this makes the city even more unstable than before.
Remember, all that was needed was to allow the Federal subsidy targeted at these low-income communities over several decades actually get to where they were meant to go. Johns Hopkins circumvented this process and was allowed to control where all this Federal funding for low-income services and programs went and sent it all to grow its own global corporation and grow a few others into large corporations leaving this economic disaster. This happened with the Baltimore City and Maryland Assembly pols still in office.
NONE OF THIS NEEDED TO HAPPEN AND THEY ARE NOW SO HARD-PRESSED TO COVER THEIR TRACKS THEY ARE BECOMING MORE AND MORE CRIMINAL IN THEIR OPERATIONS.
Forget the Maryland and national Constitutions----we will do as we please because the public has no public justice access. Well-----yes we do
PLEASE TAKE THESE TAX POLICIES TO COURT.
I have to listen to Maryland Assembly pols and Baltimore City Hall pols pretend there is not enough funding for Baltimore public schools even as everyone knows this tax policy is illegal. I speak to Maryland ACLU tied to these tax policies through education policy and development policy and she knows all of this is unconstitutional yet she pretends to be fighting for funding by pushing Wall Street bond leverage just as the bond market is ready to crash.
If you are classist and do not like the poor---you should see that all these policies are soaking middle-class as much as they harm the poor. Small businesses cannot compete with global corporate downtown anchors......and that is not free market.
U.S. 6th Circuit Court of Appeals Finds Ohio’s Targeted Investment Tax Credit Unconstitutional
Michigan’s MEGA “Is Subject to Very Substantial Doubt,” Says Plaintiffs’ Attorney For Immediate Release
Contact: Michael LaFaive, Director of Fiscal Policy
Phone: (989) 430-8669
MIDLAND — The U.S. 6th Circuit Court of Appeals today ruled that the state of Ohio’s investment tax credit program violated the United States Constitution’s commerce clause. The decision in Charlotte Cuno, et al., v. DaimlerChryser, Inc., et al., will likely have far-reaching implications for Michigan and other states that fall under the 6th Circuit Court’s jurisdiction.
“Lawmakers should focus on legally sound economic policies like broad-based tax cuts now that the Michigan Economic Growth Authority might be found unconstitutional,” said Michael LaFaive, director of fiscal policy with the Mackinac Center for Public Policy, a research institute in Midland, Mich. Professor Peter Enrich, one of the Ohio plaintiffs’ attorneys, told LaFaive today that given the decision, the MEGA program “is subject to very substantial doubt at this point.” Because Michigan is in the 6th Circuit, the MEGA program can be challenged by litigants citing the Cuno case.
The MEGA program is a 1995 creation of the Engler Administration. It was designed to offer targeted tax relief to a limited number of companies in the hope of retaining and creating new jobs. Through July 13 of this year, MEGA has offered over $1.7 billion in Single Business Tax relief for over 200 projects. This figure does not include the value of tax abatements, job-training subsidies and other incentives offered to firms in addition to their MEGA credits.
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Raise your hand if you know that Johns Hopkins is a great big global corporation! EVERYONE. Raise your hand if you know all of the private non-profits created by Hopkins to extend its personal wealth----real estate and community development around its own facilities is not non-profit---it is for-profit. The number of private non-profits funneled money from Baltimore corporations allowed to pay no taxes is breath-taking. We now see non-profit education and health businesses that are simply businesses. Global corporations donate to them to grown them into viable businesses and then expand them out of the city----out of the state---and before you know it---out of the nation.
MedStar is a national hospital corporation that makes all kinds of profit. Maryland works hard to show data that with all of its health reform-----these health systems are only making 2% profit. Forget that they are using all profits to expand overseas for health tourism promotion and for global online access to health care. That's not profit. Actually, it is. The Affordable Care Act was specifically written to increase health industry profit and profits are soaring yet, these health institutions are still categorized as non-profit. Baltimore loses so much corporate taxation from this illegal categorization of corporations as non-profits. I showed a few days ago that Community Development Network was simply a marketing arm for private investment development corporations for example. Just because they do a few local events in underserved communities does not make them a non-profit.
STUDENT NOTE: HIDING BEHIND THE CORPORATE VEIL: A GUIDE FOR NON-PROFIT CORPORATIONS WITH FOR-PROFIT SUBSIDIARIES
Winter, 2009Hastings Business Law Journal5 Hastings Bus. L.J. 189AuthorSeong J. Kim*Excerpt I. INTRODUCTION
The non-profit industry holds a unique position in the economic and social functions of the United States. The countless varieties of non-profit organizations are often labeled as the "third," "charitable," "voluntary," "philanthropic," "civil society," and "tax-exempt" sector of the economy and receive favorable treatment. 1 Currently, federal tax law exempts charities, often referred to as 501(c)(3) organizations, from paying federal income tax and allows them to receive tax deductible contributions. 2 Although there is a general assumption that non-profit organizations exercise a position that is independent from the government and private sectors, this is assumption is misguided. 3 On the contrary, numerous non-profits exercise close governance and financial relationships with both the government and private sectors. 4 Often times non-profit organizations earn a profit and do not exclusively rely on volunteers, public, or private support. 5 In fact, many non-profits conduct their operations just like for-profit businesses, complete with large profits, handsome salaries, political lobbyists, and invest billions of dollars in stocks and bonds. 6
As the financial side of the non-profit industry is measured, it has become increasingly clear that both the public and the government must carefully monitor their activities. Independent Sector, an organization created to conduct research and advocate on behalf of non-profits, estimated that as of the late 1990's there were approximately 1.6 million non-profit organizations in the United States. 7 By the year 2000, charitable organizations, excluding churches, held an astounding $ 2.07-trillion in assets ...
Profit Made from "Related" Activities Like any business, a non-profit has to cover operating costs and pay its employees. To pay employee salaries, keep the lights on and expand, a non-profit needs to generate revenue. Sometimes the non-profit generates revenue that exceeds the amount of its expenses, resulting in a profit. How it generates that profit matters tremendously. To avoid having to pay taxes on any profits it creates, a non-profit must make money on activities "related" to its non-profit status.
For example, suppose there was a non-profit group called Clothes for Kids that went around collecting old clothing, cleaning and repairing the items, and then giving the refurbished clothes away to children in need. The non-profit generates income by conducting charity dinners, raffles and fundraisers. The non-profit could properly use the income it generates from these activities to pay operating expenses and employee salaries. The non-profit won't have to pay taxes on any profits it receives, because the activities that generated the profits were directly related to its mission: providing children in need with clothing.
Profit Made from "Unrelated" Activities Sometimes, however, non-profits earn money on activities unrelated to their tax exempt purpose. In that case, the non-profit must pay taxes on the profit earned, just like any other business. While a non-profit doesn't have to worry about losing its tax exempt status if it makes a little profit from unrelated activities, it's important that such profit remain a small part of the non-profit's operation. To avoid losing tax exempt status, a non-profit should:
Exempt "Unrelated" Activities The IRS realized that distinguishing related and unrelated activities might often be difficult, so it set out a list of activities that are likely not related to a non-profit's purpose, but nevertheless will not be taxed:
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I hear this from my Democratic lawmakers in Baltimore all the time. It is the Republican policy stance that has corporate taxation as double-taxation. The fact that corporate profits are taxed and then shareholder profits taxed has nothing to do with double-taxation.....not that shareholders are really paying those taxes anyway.
Property taxes and income taxes are paid to contribute to the maintenance of community infrastructure====for the funding of schools and health services that benefit corporations and their employees.
WE HAVE ALWAYS SEEN CORPORATIONS RESPONSIBLE FOR THESE SUPPORTS AND CALL THIS---BEING A GOOD CORPORATE CITIZEN.
Corporate profit and shareholder payments are different from these requirements. It is not double-taxation and to use this term is to seek to allow corporations escape their responsibilities in supporting the communities in which they are located. Baltimore is ground zero for this ------
A DEMOCRATIC POL WOULD NEVER THINK CORPORATE TAXATION INVOLVES DOUBLE-TAXATION YET THAT IS ALL WE HEAR IN THE MARYLAND ASSEMBLY.
In Baltimore, the city resident taxes are paying all the support for these downtown global corporations and they offer no value. But where would Baltimore be without Johns Hopkins as an employer? IT WOULD BE FIRST WORLD AND NOT THIRD WORLD. Hopkins is a small private university with a tremendous amount of public assets. It created for itself the co-opting of the entire public sector of the city and if it left-----all of those assets would return to the city where they should always have been. Public health, public education, development, public services are all under the domain of public sector and all are controlled by Hopkins and Hopkins profits from this.
Below you see a definition of double-taxation which acts as though a corporation has no obligation for municipal support outside what is paid by staff and shareholders.
So much corporate tax evasion happens in Baltimore that the small businesses that could really use these benefits are told there is no money for them.
Double Taxation
Taxes
C corporations have exposure to double taxation. In C corporations, the company pays taxes on corporate profits. Shareholders of C corporations pay taxes on dividends issued by the corporation; hence the term double taxation. S Corporations and LLCs appear as pass-through entities. Owners of S corporations and LLCs have the ability to pass their share of profits and losses to their tax return.
Double taxation is a situation that affects C corporations when business profits are taxed at both the corporate and personal levels. The corporation must pay income tax at the corporate rate before any profits can be paid to shareholders. Then any profits that are distributed to shareholders through dividends are subject to income tax again at the recipient's individual rate. In this way, the corporate profits are subject to income taxes twice. Double taxation does not affect S corporations, which are able to "pass through" earnings directly to shareholders without the intermediate step of paying dividends. In addition, many smaller corporations are able to avoid double taxation by distributing earnings to employee/shareholders as wages. Still, double taxation has long been subject to criticism from accountants, lawyers, and economists.
I testified before the Baltimore City committee this week in Annapolis on several issues telling them that my organization is preparing to go to court over such a high level of unconstitutional tax policy. It is so egregious as to be unbelievable. I am hoping my testimony stopped one bill but no doubt others will proceed.
House Bill 507-----Property Tax credit for Supermarkets in 'food deserts' needs to go but I am sure Baltimore pols will continue to push it. It is yet another corporate tax break for NOTHING. These pols intend to eliminate all corporate tax base and have in Baltimore and that is why the government coffers are empty and communities crumbling. These public policies are deliberate-----and these new public policies are as bad for the citizens of Baltimore as the old ones. The same pols from Baltimore are working as hard as they can for Johns Hopkins and corporate profit.
GET RID OF THESE MARYLAND CORPORATE POLS. WHETHER REPUBLICAN OR DEMOCRAT WE DO NOT WANT BIG CORPORATIONS CONTROLLING ALL OF OUR CITY AND STATE GOVERNMENT.
Food deserts exist in underserved communities because Baltimore City Hall and Maryland Assembly chose to defund these communities and allowed for these conditions to grow. All that need be done is a little public subsidy given to people in these communities to be small business food store owners who then hire local employees and need to please consumers to keep their business. So, they are going to provide the food needed for the prices that can be afforded. The public subsidy can require a connection to local farm produce and organic products.
As the article below states-----and as I testified to the Maryland Assembly-----the bill 507 is written in just the right way as to allow only chain grocery stores to come into these communities and we know what that means....Giant, Shop Rite, and maybe Safeway. I have written about the dangers of allowing yet another industry consolidate to national chain status and that is especially true of food sources. That is what this bill is about. It seeks to send yet another food chain into communities having no other choices and give tax subsidy to do it. People who fight for a Shop Rite in underserved communities are not fighting for food justice----Shop Rite has some of the poorest quality of food there is. As I stated in testimony------the Safeway close to my community surrounded by underserved communities is so understaffed and the workers are miserable.......with not enough staffing food theft grows and these chain stores simply raise prices on the food to cover theft losses. Consequently, the food at that Safeway costs as much as what I pay at Whole Foods (Whole Paycheck). So, low-income people are being soaked of their earnings just to frequent these chain grocery stores. I spoke with a young lady on the Light Rail from Baltimore going to Glen Burnie Giant to shop because all of the chain grocery stores were too expensive in Baltimore.
This is what HB 507 perpetuates. Think about a local politician Ulysses Currie who was found to be guilty of pay-to-play profiteering by pushing for Shop Right in his district. Of course nothing happened to him for criminal behavior----but the same politics with grocery stores exist in Baltimore. The only thing said by Baltimore pols was that a Shop Rite needed to be included in this 'food desert' tax credit. The usual characters came out-----the Baltimore Health Department always comes down for bad health policy and testified that this tax credit was good for 'food deserts'.
PLEASE DO NOT ALLOW THESE POLS TO CONTINUE BAD FOOD POLICY.
This is a great article on Food Justice. Notice it is the opposite of what Baltimore pols are doing. This is the Baltimore City committee putting the bad policies forward. If your pol or justice organization is pushing chain grocery stores in your community----they are not doing what is best for that community!
[FOOD JUSTICE]
End the Corporate Exploitation of ‘Food Deserts’
03 April 2013
End the Corporate Exploitation of ‘Food Deserts’
FOOD JUSTICE ACTIVIST TANYA FIELDS SAYS BIG CORPORATIONS 'INTENTIONALLY CREATE' FOOD DESERTS IN POOR COMMUNITIES FOR PROFIT
By Tanya Fields
Read more at EBONY
If you have been following the conversation around the lack of fresh foods available in certain districts across the country, then you have probably heard the label "food desert." More and more, this term is being used to justify the existence of large corporate grocery chains in poor communities. Food activist LaDonna Redmond explains:
“The use of the phrase ‘food desert’ creates a set of problems. The first problem is the term suggests that economic development is at the expense of community development.
[It’s] really nothing more than a marketing term. Food desert identifies for corporate America how to sell cheap, off brand food to our community. When we know that cheap, highly processed food is at the crux of the rise in chronic diet related diseases.
In the end, the term masks the real harm of the U.S. corporate controlled food system by suppressing the ability of community entrepreneurs to develop and finance scalable community solutions. The danger of accepting the food desert philosophy is that it masks the real problem of the corporate controlled food system: poverty and hunger.” I couldn't agree more.
This term has been thrown around by the USDA, anti-hunger advocates and large supermarkets themselves like Wal-Mart to explain their existence in communities facing food hardship and ultimately those same corporate chains receive subsidies that aren’t available to smaller, local entrepreneurs. The arrival of these retailers that are supposed to help the community many times help to set the stage for gentrification, as well as not paying a living wage job to residents, if the jobs are even available to them at all.
There is no doubt that many impoverished communities need access to healthy, quality, culturally relevant food. But it ought to be fresh food that will support our local farmers who are also suffering from a broken food system and nourish the bellies of our babies while simultaneously stimulating economic and community development. We need food to go back to being a tool for change and culture. We must get beyond “food deserts” and eventually beyond food justice and get to food sovereignty.
What does that mean? It means that we not solely rely on large corporations to “fix” our current food predicament, a predicament that they intentionally created. It means that we analyze and utilize our current community resources to create innovative and just solutions. Take for example Melissa Danielle’s Bed-Stuy Bounty that utilizes an online platform to buy food at wholesale and then split amongst buyers in a club. She delivers by bike or you can pick up from her home in Bed-stuy. Solutions like The People’s Grocery in Oakland, CA which includes a mobile market and several urban gardens and headed by Oakland native Nikki Henderson, they have set the model for mobile markets. Or consider Growing Power started by former professional athlete Will Allen that boasts several farms including one inside the city limits of Milwaukee and Chicago. There are projects like K. Rashid Nuri’s Truly Living Well which boasts a large urban farm a block away from the eternal resting place of Coretta and Martin Luther King, Jr., a farmer’s market and Community Supported Agriculture, as well as trainings, rentals and a summer camp. All of these projects are in “food deserts”; but instead of wooing large corporate food retail chains, they instead created the solutions themselves.
There is no doubt that many of the poor communities need access to healthy, quality, culturally relevant food. We must get beyond “food deserts” and eventually beyond food justice and get to food sovereignty.
Sustaining these initiatives isn’t easy. Ms. Redmond opened a grocery store in Chicago which ultimately closed. She shared that her experience taught her that the industry is dominated by large chains beholden to large food companies. Any alternatives remain difficult to gain capital for. Growing Power itself has received major criticism for accepting $1 million from Wal-mart. In New York City, there are few, if any subsidies given to small food retailers, but corporate grocer Fresh Direct is receiving $130 million in subsidies with no community benefits and only promises to try and create jobs while adding increased truck presence in an already overburdened community.
If communities understand that corporations rarely, if ever, have our best interest at heart, and if we educate ourselves on the economics of food while seeking out, creating and supporting the positive initiatives of organizations like the ones above, we have a fighting chance of reclaiming a piece of the food system and changing the face of our communities.
Tanya Fields is a food justice activist, public speaker, educator, food enthusiast, sometimes blogger, fierce mama bear of four precocious children and the founder and executive director of the BLK Projek. She is currently raising funds to start a mobile market in the South Bronx. In her spare time she updates a food blog called Mama’s Kitchen From Scratch and does a cooking demo workshop called Fab Food on a Food Stamp
Read more at EBONY http://www.ebony.com/wellness-empowerment/food-justice-end-the-corporate-exploitation-of-food-deserts#ixzz3T2MLOVkh
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HB 123 by Kurt Anderson is yet another surgical tax break aimed at favored communties with a specific socioeconomic target. Now, I live in a middle-class lower Charles Village----and I know Baltimore working class neighborhoods feel the same....our property taxes are so high because corporations are paying no taxes and all of this gerrymandered tax policy is making this worse. The citizens of Baltimore here the longest have been used as fodder for decades and we are going to court over Baltimore tax policy. As I said yesterday----the Maryland Constitution does not allow for egregious taxation and it requires taxation to be uniform.
Baltimore has plenty of people living in the city----it simply has public policy deliberately written to keep them impoverished and unable to contribute to the welfare of the city. This is not the fault of the residents----it is the fault of Baltimore Development and Johns Hopkins and their pols in Baltimore City Hall. They have sucked so much public money to themselves creating huge corporations =====taking over all of Baltimore's public sector to the detriment of the citizens of Baltimore====that people do not want to stay in this city. People do not want this kind of governing either long-term residents or new residents.
This bill is an example of this bad public policy and I know Kurt Anderson is simply bringing it forward because it was written by Johns Hopkins.
It is important to know that Baltimore's tax scheme is not being taken all over Maryland. Other counties would be aghast at the level of economic damage done with this subsidy favoritism that is completely unconstitutional.
Maggie McIntosh and Kurt Anderson as senior Maryland Assembly pols lead in these policies and they know they are unconstitutional and they do it simply to move wealth to a few. If you think a Harbor East filled with global corporations and criminal financial corporations is good development----you are third world in your thinking.
STOP ALLOWING THESE POLS TO STAY IN OFFICE. THEIR LEGACY IS HORRIBLE.
The key with these tax policies is that they are specific to Baltimore and within Baltimore the lack of uniformity is indeed harming individuals and communities. I encourage people to pursue this in court.
'Currently, to bring suit against the state, a taxpayer must have standing; they must show harm, caused from the state action, and different from the generalized harm suffered by other taxpayers'.
It's important to know as stated below-----economists overwhelmingly have shown no benefit derived from these tax credits and as I stated in the Maryland Assembly----Legislative Services have said the same for Enterprise Zone tax credits. THEY ARE NOT NEEDED. We want small and regional businesses as our state and city economic driver not global and national corporations.
Economic Development Are Targeted Incentives Constitutional?
By Michael D. LaFaive and Jeffery Weeden, published on July 6, 2004
Recently in Greenville, Michigan, Federal Mogul employees approved a new contract that contained more than $5 million in pay and benefit concessions in order to ensure that their plant remains in Michigan. Management at Federal Mogul had threatened to move to Mexico where it costs less to do business. The state offered additional incentives to help prevent Federal Mogul from moving. To date, the size of the incentive package has not been announced.
Economists have argued that such targeted incentives are unnecessary for economic growth and unfair to those who do not receive them. Some people are using the courts to try to thwart targeted incentive programs. Late last year the Mackinac Center described a case in Ohio that could change the way all 50 states try to lure business. An expanded version of the article appears below.
Should states be able to offer businesses tax breaks and other subsidies in order to lure them into locating a new plant within their boundaries? A case currently before the United States Sixth Circuit Court of Appeals will decide whether this practice — which favors some businesses at the expense of all the rest — is constitutional.
For decades now, policy-makers and state legislatures have been developing exotic schemes to lure businesses to their states, keep the ones they have, and “create” more jobs. Nationwide, these subsidies and tax breaks have reached an estimated annual value of nearly $50 billion.
The state of Michigan operates a number of such programs, including the Michigan Economic Growth Authority (MEGA), which has the power to grant tax credits to businesses. The Michigan Economic Development Corporation, the state’s quasi-public “jobs” agency, also gives out millions of dollars-worth of property tax abatements and oversees the state’s “renaissance zone” program, which provides tax relief to geographical areas of the state. This department has been the subject of state Senate hearings considering whether Michigan’s government should be in the business of trying to pick winners and losers in the marketplace.
But a far more important development is Cuno, et.al. v. Daimler Chrysler, in which the plaintiffs argue that such incentives violate the Commerce Clause of the U.S. Constitution. The case was filed by a number of parties, including two Michigan residents, and is aimed also at the state of Ohio and the city of Toledo.
The Cuno case is described as a “true test case” because it was brought largely to test the constitutionality of such programs. In March 2000, attorneys for the plaintiffs filed suit over a $300 million incentive package the state of Ohio offered to DaimlerChrysler in exchange for maintaining long-standing jeep production in Toledo, instead of opening a new plant in Michigan, just over the border.
The suit alleges that Ohio’s granting of property tax abatements and/or tax credits to DaimlerChrysler represents a violation of Commerce Clause restraints.
According to plaintiff counsel Peter Enrich, the Commerce Clause was designed to prohibit state regulation and tax policy from interfering with economic activity between the states. For example, one state may not raise barriers to competition with another state in order to protect its own interests.
But what about the power of a state being used to advance its own interests at the expense of another state? Does this not also constitute undue interference, on the part of that state, with interstate commerce? Enrich argues that the United States Supreme Court has “consistently struck down on Commerce Clause grounds, state tax breaks or benefits that discriminate against out-of-state economic activities or interstate enterprises.” In other words, when one state provides financial incentives to a business to build or expand a facility within its borders, and those incentives make the investment less costly than it would otherwise be if it were invested in another state, the incentive is unconstitutional.
On the other hand, in their brief before the court, defendant’s attorneys argue that the Commerce Clause “… does not require that all states maintain the same taxing system and rates.” In other words, incentives are just part of the states’ overall tax structures. Michigan may have a lower overall income tax burden, but the fact that a business locating in Michigan has lower taxes than one locating in Ohio doesn’t constitute discrimination against Ohio. Defendants argue that the Commerce Clause only prohibits states from erecting barriers to commerce. For instance, Ohio may not impose tariffs on Michigan-manufactured Cadillacs to protect Ohio-made Hondas.
At least one scholar thinks that judges may end up splitting the baby on tax incentives, declaring some actions unconstitutional but allowing others to remain. Robert D. Plattner, a correspondent for State Tax Notes, writes that “if the taxpayer’s liability in the ‘home’ state would be higher if it invests elsewhere than if it invests in-state, the incentive violates the requirement of tax neutrality and is unconstitutional.”
Plattner also argues that tax incentives that cause “spillover” tax relief are also unconstitutional. Spillover relief can occur when companies are given incentives to expand existing facilities rather than to build new ones. He argues that benefits from the tax relief may not be specific to the new part of the property (the expansion), but must abate the property tax on the older facility as well.
For example, in May of 2000, MEGA approved an incentive package valued at as much as $12.1 million for the Coca-Cola Company to expand its facility in Paw Paw. The company expanded an existing building and added a new one to house its wastewater treatment system. The tax credit portion of the deal was valued at over $5 million. But the company was also promised state and local abatements on its property, valued at $6.2 million.
According to Palmer, under this scenario, the tax credits would be unconstitutional if they made doing business in Michigan less expensive for Coca-Cola than it would be for the company to do the same business in a competing state. The property tax abatements would almost certainly be unconstitutional because the expansion won abatements for the entire property, not just for the new building and building expansion.
Establishing taxpayer standing to bring a lawsuit is a significant problem regarding challenging the Constitutionality of state tax incentives. Currently, to bring suit against the state, a taxpayer must have standing; they must show harm, caused from the state action, and different from the generalized harm suffered by other taxpayers. The requirement is designed to prevent abuse of the court system by limiting access to those with a specific and personal stake in the litigation. However, without taxpayer standing, citizens have almost no opportunity to challenge the Constitutionality of targeted tax incentives. In cases like Cuno, taxpayers lack standing because they can only show the kind of generalized harm suffered by fellow state taxpayers. With taxpayers shut out of court state tax incentives and their harmful side effects are insulated from judicial review.
One way to establish standing to challenge state tax incentives is to show a specific injury like the loss of income, job, or business, etc., caused by the state action. Also, Congress can grant standing through legislation. Targeted tax incentives can act as unconstitutional protectionism, harm the economic union of the states, and result in the kind of economic Balkanization that the Commerce Clause was intended to address. The Commerce Clause made unconstitutional the harmful “race to the bottom” effects of state protectionism that are analogous to the intent and effect of targeted state tax incentives. By establishing standing to bring suit either by showing either individual harm, or through a grant of Congress taxpayers could finally hold states accountable for targeted tax incentives.
As state lawmakers debate the merits of government-sponsored economic development in Michigan’s economic future, they would be wise to remember that the court may render many of their actions moot. The plain-English reason isn’t hard to fathom: because it’s fundamentally unfair for government to grant advantage to one business and not to others. And if the Constitution is found to condemn the practice, states may well follow suit.
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Michael LaFaive is director of fiscal policy, and Jeffery Weeden is an adjunct scholar with the Mackinac Center for Public Policy, a nonprofit research and educational institute.
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Baltimore cannot do broad-based tax cuts because it has mortgaged so much of its corporate tax base already the city cannot function. This is why mostly selected global corporations are getting tax relief as small businesses suffer the high rates that the public does. So, now they are going with surgical cuts and all of this makes the city even more unstable than before.
Remember, all that was needed was to allow the Federal subsidy targeted at these low-income communities over several decades actually get to where they were meant to go. Johns Hopkins circumvented this process and was allowed to control where all this Federal funding for low-income services and programs went and sent it all to grow its own global corporation and grow a few others into large corporations leaving this economic disaster. This happened with the Baltimore City and Maryland Assembly pols still in office.
NONE OF THIS NEEDED TO HAPPEN AND THEY ARE NOW SO HARD-PRESSED TO COVER THEIR TRACKS THEY ARE BECOMING MORE AND MORE CRIMINAL IN THEIR OPERATIONS.
Forget the Maryland and national Constitutions----we will do as we please because the public has no public justice access. Well-----yes we do
PLEASE TAKE THESE TAX POLICIES TO COURT.
I have to listen to Maryland Assembly pols and Baltimore City Hall pols pretend there is not enough funding for Baltimore public schools even as everyone knows this tax policy is illegal. I speak to Maryland ACLU tied to these tax policies through education policy and development policy and she knows all of this is unconstitutional yet she pretends to be fighting for funding by pushing Wall Street bond leverage just as the bond market is ready to crash.
If you are classist and do not like the poor---you should see that all these policies are soaking middle-class as much as they harm the poor. Small businesses cannot compete with global corporate downtown anchors......and that is not free market.
U.S. 6th Circuit Court of Appeals Finds Ohio’s Targeted Investment Tax Credit Unconstitutional
Michigan’s MEGA “Is Subject to Very Substantial Doubt,” Says Plaintiffs’ Attorney For Immediate Release
Contact: Michael LaFaive, Director of Fiscal Policy
Phone: (989) 430-8669
MIDLAND — The U.S. 6th Circuit Court of Appeals today ruled that the state of Ohio’s investment tax credit program violated the United States Constitution’s commerce clause. The decision in Charlotte Cuno, et al., v. DaimlerChryser, Inc., et al., will likely have far-reaching implications for Michigan and other states that fall under the 6th Circuit Court’s jurisdiction.
“Lawmakers should focus on legally sound economic policies like broad-based tax cuts now that the Michigan Economic Growth Authority might be found unconstitutional,” said Michael LaFaive, director of fiscal policy with the Mackinac Center for Public Policy, a research institute in Midland, Mich. Professor Peter Enrich, one of the Ohio plaintiffs’ attorneys, told LaFaive today that given the decision, the MEGA program “is subject to very substantial doubt at this point.” Because Michigan is in the 6th Circuit, the MEGA program can be challenged by litigants citing the Cuno case.
The MEGA program is a 1995 creation of the Engler Administration. It was designed to offer targeted tax relief to a limited number of companies in the hope of retaining and creating new jobs. Through July 13 of this year, MEGA has offered over $1.7 billion in Single Business Tax relief for over 200 projects. This figure does not include the value of tax abatements, job-training subsidies and other incentives offered to firms in addition to their MEGA credits.
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Raise your hand if you know that Johns Hopkins is a great big global corporation! EVERYONE. Raise your hand if you know all of the private non-profits created by Hopkins to extend its personal wealth----real estate and community development around its own facilities is not non-profit---it is for-profit. The number of private non-profits funneled money from Baltimore corporations allowed to pay no taxes is breath-taking. We now see non-profit education and health businesses that are simply businesses. Global corporations donate to them to grown them into viable businesses and then expand them out of the city----out of the state---and before you know it---out of the nation.
MedStar is a national hospital corporation that makes all kinds of profit. Maryland works hard to show data that with all of its health reform-----these health systems are only making 2% profit. Forget that they are using all profits to expand overseas for health tourism promotion and for global online access to health care. That's not profit. Actually, it is. The Affordable Care Act was specifically written to increase health industry profit and profits are soaring yet, these health institutions are still categorized as non-profit. Baltimore loses so much corporate taxation from this illegal categorization of corporations as non-profits. I showed a few days ago that Community Development Network was simply a marketing arm for private investment development corporations for example. Just because they do a few local events in underserved communities does not make them a non-profit.
STUDENT NOTE: HIDING BEHIND THE CORPORATE VEIL: A GUIDE FOR NON-PROFIT CORPORATIONS WITH FOR-PROFIT SUBSIDIARIES
Winter, 2009Hastings Business Law Journal5 Hastings Bus. L.J. 189AuthorSeong J. Kim*Excerpt I. INTRODUCTION
The non-profit industry holds a unique position in the economic and social functions of the United States. The countless varieties of non-profit organizations are often labeled as the "third," "charitable," "voluntary," "philanthropic," "civil society," and "tax-exempt" sector of the economy and receive favorable treatment. 1 Currently, federal tax law exempts charities, often referred to as 501(c)(3) organizations, from paying federal income tax and allows them to receive tax deductible contributions. 2 Although there is a general assumption that non-profit organizations exercise a position that is independent from the government and private sectors, this is assumption is misguided. 3 On the contrary, numerous non-profits exercise close governance and financial relationships with both the government and private sectors. 4 Often times non-profit organizations earn a profit and do not exclusively rely on volunteers, public, or private support. 5 In fact, many non-profits conduct their operations just like for-profit businesses, complete with large profits, handsome salaries, political lobbyists, and invest billions of dollars in stocks and bonds. 6
As the financial side of the non-profit industry is measured, it has become increasingly clear that both the public and the government must carefully monitor their activities. Independent Sector, an organization created to conduct research and advocate on behalf of non-profits, estimated that as of the late 1990's there were approximately 1.6 million non-profit organizations in the United States. 7 By the year 2000, charitable organizations, excluding churches, held an astounding $ 2.07-trillion in assets ...
Profit Made from "Related" Activities Like any business, a non-profit has to cover operating costs and pay its employees. To pay employee salaries, keep the lights on and expand, a non-profit needs to generate revenue. Sometimes the non-profit generates revenue that exceeds the amount of its expenses, resulting in a profit. How it generates that profit matters tremendously. To avoid having to pay taxes on any profits it creates, a non-profit must make money on activities "related" to its non-profit status.
For example, suppose there was a non-profit group called Clothes for Kids that went around collecting old clothing, cleaning and repairing the items, and then giving the refurbished clothes away to children in need. The non-profit generates income by conducting charity dinners, raffles and fundraisers. The non-profit could properly use the income it generates from these activities to pay operating expenses and employee salaries. The non-profit won't have to pay taxes on any profits it receives, because the activities that generated the profits were directly related to its mission: providing children in need with clothing.
Profit Made from "Unrelated" Activities Sometimes, however, non-profits earn money on activities unrelated to their tax exempt purpose. In that case, the non-profit must pay taxes on the profit earned, just like any other business. While a non-profit doesn't have to worry about losing its tax exempt status if it makes a little profit from unrelated activities, it's important that such profit remain a small part of the non-profit's operation. To avoid losing tax exempt status, a non-profit should:
- Keep any unrelated activities that generate profit small
- Avoid spending staff time on unrelated activities
- Never hire someone dedicated to performing the unrelated activities
Exempt "Unrelated" Activities The IRS realized that distinguishing related and unrelated activities might often be difficult, so it set out a list of activities that are likely not related to a non-profit's purpose, but nevertheless will not be taxed:
- Sales of merchandise that has largely been donated to the non-profit
- Distribution of items worth less than $5 in return for donations
- Activities that primarily benefit members, patients, students, officers or employees of the non-profit
- Activities where nearly all of the work is done by volunteers
- The sale, rental or exchange of donor mailing lists
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I hear this from my Democratic lawmakers in Baltimore all the time. It is the Republican policy stance that has corporate taxation as double-taxation. The fact that corporate profits are taxed and then shareholder profits taxed has nothing to do with double-taxation.....not that shareholders are really paying those taxes anyway.
Property taxes and income taxes are paid to contribute to the maintenance of community infrastructure====for the funding of schools and health services that benefit corporations and their employees.
WE HAVE ALWAYS SEEN CORPORATIONS RESPONSIBLE FOR THESE SUPPORTS AND CALL THIS---BEING A GOOD CORPORATE CITIZEN.
Corporate profit and shareholder payments are different from these requirements. It is not double-taxation and to use this term is to seek to allow corporations escape their responsibilities in supporting the communities in which they are located. Baltimore is ground zero for this ------
A DEMOCRATIC POL WOULD NEVER THINK CORPORATE TAXATION INVOLVES DOUBLE-TAXATION YET THAT IS ALL WE HEAR IN THE MARYLAND ASSEMBLY.
In Baltimore, the city resident taxes are paying all the support for these downtown global corporations and they offer no value. But where would Baltimore be without Johns Hopkins as an employer? IT WOULD BE FIRST WORLD AND NOT THIRD WORLD. Hopkins is a small private university with a tremendous amount of public assets. It created for itself the co-opting of the entire public sector of the city and if it left-----all of those assets would return to the city where they should always have been. Public health, public education, development, public services are all under the domain of public sector and all are controlled by Hopkins and Hopkins profits from this.
Below you see a definition of double-taxation which acts as though a corporation has no obligation for municipal support outside what is paid by staff and shareholders.
So much corporate tax evasion happens in Baltimore that the small businesses that could really use these benefits are told there is no money for them.
Double Taxation
Taxes
C corporations have exposure to double taxation. In C corporations, the company pays taxes on corporate profits. Shareholders of C corporations pay taxes on dividends issued by the corporation; hence the term double taxation. S Corporations and LLCs appear as pass-through entities. Owners of S corporations and LLCs have the ability to pass their share of profits and losses to their tax return.
Double taxation is a situation that affects C corporations when business profits are taxed at both the corporate and personal levels. The corporation must pay income tax at the corporate rate before any profits can be paid to shareholders. Then any profits that are distributed to shareholders through dividends are subject to income tax again at the recipient's individual rate. In this way, the corporate profits are subject to income taxes twice. Double taxation does not affect S corporations, which are able to "pass through" earnings directly to shareholders without the intermediate step of paying dividends. In addition, many smaller corporations are able to avoid double taxation by distributing earnings to employee/shareholders as wages. Still, double taxation has long been subject to criticism from accountants, lawyers, and economists.
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