Tax Perks Didn't Bring the Growth, Jobs AT&T, Verizon Promised Time and time again we're told that if the broadband gets deregulated, we'll be awash in all manner of low prices, innovation and competition. Of course if you stop and actually look at the data, time and time again it's made clear the exact opposite usually happens, with fewer regulatory checks and balances resulting in the less-regulated company more aggressively taking advantage of consumers stuck in uncompetitive, not-at-all-free markets. The same usually happens when it comes to subsidies and tax incentives; companies like Verizon getting billions of dollars in both, then quote: AT&T estimated its federal tax bill last year at $3 billion, down from about $5.9 billion in 2007, before the tax relief was enacted. Verizon estimated that it would get $197 million back last year, compared with a 2007 bill of $2.6 billion. Meanwhile, the companies have kept their capital spending relatively flat since the stimulus was adopted, and their employee count has dropped by more than 100,000 people, a fifth of their combined work forces. The Journal is generous in saying fixed-line spending is flat; AT&T just got done again slashing their fixed-line investment budget by another $3 billion. Bonus depreciation is essentially a zero-interest loan by the government, purportedly doled out because it's supposed to result specifically in job growth. Except as the Journal points out, numerous studies indicate that's simply not happening. The same usually happens when it comes to subsidies and tax incentives; companies like Verizon getting billions of dollars in both, then walking away from obligations with a wink, handshake, and a nod (and some campaign contributions). This week the Wall Street Journal specifically tried to quantify the benefits of bonus depreciation (aka letting companies push tax obligations into the future). They didn't find any:The Journal is generous in saying fixed-line spending is flat; AT&T just got done again slashing their fixed-line investment budget by another $3 billion. Bonus depreciation is essentially a zero-interest loan by the government, purportedly doled out because it's supposed to result specifically in job growth. Except as the Journal points out, numerous studies indicate that's simply not happening.







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Most recommended from 26 comments



Rob

Premium Member

join:2001-08-25

Miami, FL 5 recommendations Rob Premium Member Imagine a world without T-Mobile & Sprint And just the other day AT&T and Verizon were stating that they faced tougher competition in the wireless market due to T-Mobile & Sprint's aggressive competition.



Now, let's imagine a world where T-Mobile & Sprint was gobbled up by AT&T and Verizon.



I shudder to think what a world we'd be in. jkeelsnc

join:2008-08-22

Greensboro, NC 1 edit 2 recommendations jkeelsnc Member Taxes When these corporations keep getting more tax cuts and all it does is make them more profitable that really isn't a value proposition except on Wall Street. The average person loses with less competition, less jobs, and more money to the 1 percent. That's all it does. If they really invested the money back into their business it would be different but that is not how tax cuts work. Raise taxes and sock it to em.