Tax fairness has become a centerpiece of national debate, from the president's reelection to the recent deal surrounding the so-called fiscal cliff. In Illinois, taxpayers want to make sure corporations in the State are paying their fair share as well. According to the Internal Revenue Service, the federal corporate tax rate from 1952-63 -- a period of prosperity and a significant rise in the middle class -- was 52 percent. Today it's 35 percent. By working loopholes and exceptions many corporations are able to reduce their effective tax rate to as low as zero. As it stands corporations doing business in Illinois do not have to disclose to the public what taxes, if any, they contribute to the state.
This lack of transparency inspired Illinois Senate President John Cullerton, D-Chicago, to introduce the Illinois Corporate Tax Disclosure and Responsibility Act. The bill, SB 282, has passed the State Senate and would require publicly held companies to report their state income tax liability. After two years, the information would be made available to the public. Now it's up to the Illinois House to approve the bill and send it to the Governor.
Illinois voters think this is a good idea. According to a new poll by Public Policy Polling, a non-partisan polling firm, 79 percent of Illinois voters think that the state should require corporations to disclose how much they pay in state income taxes. The proposal resonates across partisan lines, with 75 percent of Republicans favoring the idea. As corporations benefit greatly from public infrastructure such as roads, public transportation, job training programs, as well as tax breaks, it seems fair that we know how much they are paying.
Thanks to Citizens for Tax Justice, a public interest organization specializing in tax issues, we get a peek at state income tax rates for some of Illinois' largest companies. According to a CTJ report, Illinois pharmaceutical giant Baxter International paid an effective state income tax rate of negative 3.1 percent between 2008-2010. This means they essentially earned a refund, despite clearing nearly $900 million in profits. Because these numbers represent taxes Baxter paid to numerous states, we have no way of knowing if any of these revenues even made it to Illinois.
The bill is now in the hands of the Illinois House of Representatives. The campaign to advance this legislation has been led by organizations made up of and led by everyday taxpayers. IIRON, Illinois People's Action, Lakeview Action Coalition, Northside P.O.W.E.R. and SOUL are asking that people throughout the State join the fight to ensure we corporations pay their fair share. You can do your part by calling your Illinois State Representative.
America is not broke, but lots of Americans are. One big reason has been changes in our tax code that favor big corporations. Illinois corporations have voiced their opposition to Cullerton's legislation. And yet all the legislation does is require that they disclose how much they pay to the state. Working families in the state are paying taxes. All we want to do is make sure the big corporations are doing the same. If they have nothing to hide, why do they care? If they have something to hide, and Members of the Illinois House are not ready to support this legislation, then we should all care.